You invest assuming the Australian economy is on a smooth road to growth? I don't. I don't expect Australia to emerge unscathed from the liquidity crisis. I expect Australia to suffer, and I'll be there to take advantage of it.
Surely a crisis is the BEST time to invest? And you're cashed up, no?
Alex
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Dear AlexLee,
1. I make no apologies that I used to derive some investing comforts from the Australia's past track record of 16 years of continued economic prosperity and the fact that Australia has always managed to escape relatively unscathed from the previous major financial crises over the last 16 years.
2. The fact I do consider Australia to be much "God-Blessed" Nation, the best place to live on Earth, highly successful and unique in the world to be able to continually enjoy the prolonged economic prosperity and to successfully attract a lot of international immigration over the last 16 years, is one major reason why I choose to invest here;- even though I may not truly understand how Australia is effectively governed or/and actually operated on the ground, so as to be able to enjoy such prolonged economic prosperity.
3. Please note that as fellow investors, we'll each have different investing considerations and different risk tolerance threshold to support/complement our own unique investing strategy.
4. What works well for you may not neccessarily work well for me. What you found "comfortable" to invest, may not neccessarily appeal to me, either.
5. While I am presently "comfortable" investing and have personally find it easy and highly profitable to invest in a booming market situation, whether be it in the booming Goldcoast property market from 2001-2003 period or more recently, in the Perth's booming housing market during 2003-2006 period.
6. However, I do acknowledge that I am presently still "new", relatively "in-experienced" and not as comfortable in investing in a declining housing market or/and in one which can be greatly adversely affected/"dictated" by the external financial crises occuring outside Australia.
7. This is despite I am presently open to the idea and willing/trying to learn how to invest safely and profitably under such different/adverse circumstances, at this point in time. The challenge for me now, is one of investing safety, prudency and ability to profit from such different investing circumstances.
8. Despite I having the "head" knowledge, at this point in time that more monies can be made during a crisis/bust than during a boom, and that monies are made when we buy rather than when we sell the houses, I am still not fully at ease nor mentally ready yet, to comfortably and decisively act on this kind of new investing under such adverse circumstances/market conditions.
9. If you are already comfortable investing in a bust/crisis scenario and able to invest profitably from it yourself, I extend my sincere and personal congratulations to you.
10. However, it does not neccessarily mean that I will immediately follow you likewise, at this point in time.
11. While I remain optimistic about investing into the Sydney housing market from 2009 onwards, based on its past property cycle trends/timing, there are new "risks" involved following the new uncertainities arising from and given the recent change in the RBA chairmanship, change in the Australian Federal Govt and midst the present unfolding of the various major global financial crises worldwide.
12. Consequently, I prefer to and have personally find it more comfortable for myself, to cash out part of my existing property portfolio and to lower my personal debt level at this point in time as well as to hold a bigger cash reserve as my safety buffer even though my capital may not be working as efficiently as before.
13. Being new and in-experienced in investing under such adverse circumstances, I have decided that safety and prudency shall pre-dominate my investing concerns, instead of its capital usage efficiency and profit maximisation.
Cheers,
Kenneth KOH