I have a couple of friends who are in the financial industry and their usually very conservative game plans and pointing to the volatility of the market has usually been accurate. It's very pessimistic. I will always hear the 12% percent rule around here (silicon valley region in California) where after a downturn in real estate, any growth past 12% percent of the bottom value in a 12 month period can and will spell trouble down the line. Hope your real estate grows, yes, but slowly as to avoid big, sudden falls. And this can relate to other investments, too.
But then I read a lot of business "pop" magazines who have to entertain as well as educate and those publications like Forbes, Fortune, and Businessweek love to break the story on the next big thing (Gold, then dot.com, then real estate, sure fire companies like Enron and Worldcomm, then US oil, etc) and emphasize get rich quick. There are a lot of returning and new real estate agents who are thrilled to see the local real estate growing at 15% percent, and even 20% percent and think the market is mostly isolated from the woes of Wall Street. There's a huge sense of optimism that the recession is over and things will snap back into play "right away".
............
I see merit in both sides and both have times in history that can back their point, but I often wonder about another big recession (mostly guaranteed by modern era volatility). I lived through the big drops and downturn in the early 1980s just as I finished high school, saw how the economy in 1992 shaped a presidential election and brought it to the forefront, and then saw this latest downturn. I don't know if it's my generation having seen more bad than good, or if things are as unstable as they seem and will continue on that path.
Below is an article on Canada but represents some of the fear based "facts" I heard right before the giant downturn in San Jose which rivaled dot.bomb. When hearing about how things are connected I stayed put but my buddies who didn't heed real estate market vulnerabilities lost several lifetimes worth of earnings:
http://blogs.reuters.com/financial-...-overheated-housing-market-central-bank-says/
Thoughts?
But then I read a lot of business "pop" magazines who have to entertain as well as educate and those publications like Forbes, Fortune, and Businessweek love to break the story on the next big thing (Gold, then dot.com, then real estate, sure fire companies like Enron and Worldcomm, then US oil, etc) and emphasize get rich quick. There are a lot of returning and new real estate agents who are thrilled to see the local real estate growing at 15% percent, and even 20% percent and think the market is mostly isolated from the woes of Wall Street. There's a huge sense of optimism that the recession is over and things will snap back into play "right away".
............
I see merit in both sides and both have times in history that can back their point, but I often wonder about another big recession (mostly guaranteed by modern era volatility). I lived through the big drops and downturn in the early 1980s just as I finished high school, saw how the economy in 1992 shaped a presidential election and brought it to the forefront, and then saw this latest downturn. I don't know if it's my generation having seen more bad than good, or if things are as unstable as they seem and will continue on that path.
Below is an article on Canada but represents some of the fear based "facts" I heard right before the giant downturn in San Jose which rivaled dot.bomb. When hearing about how things are connected I stayed put but my buddies who didn't heed real estate market vulnerabilities lost several lifetimes worth of earnings:
http://blogs.reuters.com/financial-...-overheated-housing-market-central-bank-says/
Thoughts?