I was reflecting the other day on some very interesting thoughts. For argument’s sake, stock are down about 50% since last year – that’s pretty disastrous, I’d say. And real estate is down on average, 22-25%. So why is everyone focusing on the decline in housing as the major drag on the economy? Stock are twice as bad as housing assets.
In fact, I would argue that real estate is the better performing asset, except, of course for cash. And we all know that cash will be a terrible investment a year or two from now because all the economic stimulus needed to boost the economy will begin to create massive inflation.
And, if I go back to my finance text books, I was taught that the best assets to own as hedges against inflation are real estate, stocks and gold. (Did you know that the Saudi’s are now requiring to get 10% of their payment in gold – what does that tell you??)
I’d be buying all three if I had cash. I think that real estate will begin to bottom and people will stick their heads up out of the bunker and begin to plan for the coming inflation. Start looking for those values, be opportunistic and of course when it comes to real estate – locattion, location, location!!