Now is the time to buy

[Indifference]

Now is always the time to buy....

Now is always the time to buy, somewhere, for someone. There is ALWAYS a relative bargain somewhere. I like how the news can take both sides simultaneously (good time to buy & sell...) and everyone gets excited.

I buy every month... maybe not houses, but I buy more investment positions each and every month. Then one day, when the market is RIGHT for ME, in MY preferred area/market, I will roll one asset into the other.

Right now (actually 18 months ago), I rolled significant capital into non-RE assets although I still hold some property. IMO, across the board "bargains" will be in higher supply in 2012-2013, depending on macro & micro economic conditions.

Just love the main stream hype every month or two... I wonder who "bought" the news this time. (as in paid for it...)

 

[see_change]

Of course anyone looking at this fact impartially would realise there is more than one way for this weighting to change (infact the rebalance is already occurring at the moment by stronger falls in other cities, rather than your implied room for stronger price appreciation in Sydney).

That said I wonder whether environmental changes may alter the reasons for higher prices in Sydney, for example I imagine one of the main drivers for growth/higher prices in Sydney has been from leading business activity, but new internet and phone technologies mean business can be performed anywhere more easily than 10 years ago... Why should Sydneys prices be higher if supply can catch up to current demand?

Valid points . Yes some places are dropping , and I'm certainly not a believer that prices only go up.

Where we looking , prices have gone sideways for the last seven years ,which for that area is unusual. Currently we're buying in our super and as long as we pay off the units we're buying prior to retirement that works for us. It's more of buying our own indexed pension . However at the moment there doesn't seem to be much stock on the market and anything we see that is reasonably priced and marketed well is selling quickly.

Cliff

 

[Beorn]

There is clearly so much flux in the international financial scene, and so much doubt over China and hence Oz exports (eg today's article in CBS Marketwatch*) that anyone buying now must be a little bit dotty.


* Iron ore prices have reached a turning point due to recent global economic turmoil and a slump in the Chinese steel market .... Supply will likely exceed demand later next year or in early 2013, as several iron ore projects will start production then.

 

[Samwise]

*that does not stop them being profitable

 

[Beorn]

*that does not stop them being profitable

Nouriel Roubini and others expect China's growth to sink to 5 percent or less after 2013. You do not want to be in Oz RE when that happens.

Roubini's research firm estimates that China has wasted $1.4 trillion since 2008 on investments that will likely end up as bad debts.

 

[sash]

Hmmm.....Roubini needs to go to the loonie bin.....does he realise that the Chinese politburo would be lynched if growth in China dips below 6%??

The Chinese are undergoing major restructuring of the economy...they cannot affort to decrease the economic rate of gorwth. If this happens....there is going to be blood in the streets.

China already has issues in Tibet and Northwest provinces...if they have trouble in Han populated eastern provinces they will be in deep poo.

I can see GDP growth slow to 8-8.5% (got close in the GFC)....but definitely has not gone below this for many years! The Chinese govt has a large slush fund to address this.

Nouriel Roubini and others expect China's growth to sink to 5 percent or less after 2013. You do not want to be in Oz RE when that happens.

Roubini's research firm estimates that China has wasted $1.4 trillion since 2008 on investments that will likely end up as bad debts.

 

[Aaron_C]

That's if you truly believe Chinese GDP figures....no one really does.

 

[see_change]

There is clearly so much flux in the international financial scene, and so much doubt over China and hence Oz exports (eg today's article in CBS Marketwatch*) that anyone buying now must be a little bit dotty.


* Iron ore prices have reached a turning point due to recent global economic turmoil and a slump in the Chinese steel market .... Supply will likely exceed demand later next year or in early 2013, as several iron ore projects will start production then.

Actually that's one reason that some poeple are moving into property. There is a lot of money around and it has to go somewhere. If the markets are so crazy ( greek referendum ..?? !!! ) unless you leave your money in the bank where else will most people put it.

I'm not expecting property to double in the next couple of years , but I pretty certain that well positioned property in Sydney will give me as a secure return ( with alot less of an emotional roller coaster ride ) than a protfolio of shares over that time frame. Having said that we do invest in shares , though at the moment our exposure to the market is a lot lower than it has been for a while.

Cliff

 

[knightm]

There is clearly so much flux in the international financial scene, and so much doubt over China and hence Oz exports (eg today's article in CBS Marketwatch*) that anyone buying now must be a little bit dotty.

So where are you suggesting to put money right now beorn?

 

[Aaron Sice]

So where are you suggesting to put money right now beorn?

under the mattress, probably.

stocks will be worthless if any of this comes to play.

 

[MIW]

I see partly sunny day others partly cloudy!

You are spot on.
I still focus on shares becasue i think the next cycle will belong to shares more so than property (because of the gravitational pull of the mean return within asset classes over long periods, see below), but if i was forced to limit my investing to residential property then i would be focussing on the Sydney market.

In 1987 the share market peaked at around 2400. 24 years later the market is around 4000. Whats the compound return over this period, and how does it stack up against the long term trend. Like any long term analysis, these sought of comparisons have no relevance when trying to forecast short and medium term future results.

What about the demographic changes happening here when the baby boomers will soon start to retire? I for one may be thinking that they may downsize or pull out some money of the stock market to enjoy their cruises, their savings in retirement.
I agree that all asset classes become overvalued and undervalued and if we can truly pick these times and switch than fortunes will be made. Wealth is transferred not lost.
I personally still think the market is overvalued but once stocks get to about 8.5 PE than perhaps there will be value in buying or getting in. I sold nearly all my stocks in Super in June 2011 just before the correction and have invested in the last 3 years into hard commodities (physical gold/silver) for insurance.
As for skater, well the history is full of happenings, just study it, we had recessions, depressions, stock corrections (1987, IT Bubble), GFC, wars, QLF floods, now Europe and US, etc.... So it depends how you see the day, whether partly sunny or partly cloudy, I choose to see it partly sunny and you obviously see it partly cloudy. What's the point of worring about the things I have no control over it....
Yes, retailers are down, as Internet shopping is advancing, I for one have discoverd it, so the whole new way we live is changing, as it had for many years before.
Am I investing, well, you bet, as the cycles come and go, assets become overvalued and undervalued, and the time just passes by....
Remember, you have to be in it to win it...So good luck to you all.

 

[skater]

As for skater, well the history is full of happenings, just study it, we had recessions, depressions, stock corrections (1987, IT Bubble), GFC, wars, QLF floods, now Europe and US, etc.... So it depends how you see the day, whether partly sunny or partly cloudy, I choose to see it partly sunny and you obviously see it partly cloudy. What's the point of worring about the things I have no control over it....

I don't know how you thought that I was worrying about the market. I think you must have me confused with another poster.

 

[chilliblue]

What about the demographic changes happening here when the baby boomers will soon start to retire? I for one may be thinking that they may downsize or pull out some money of the stock market to enjoy their cruises, their savings in retirement.
I.

All the baby boomers that I know not one has any intention of selling any IP and if they are selling PPOR then they are duoing so to purchase something more of their needs (ie single level) but at the same money.

 

[trendsta]

What about the demographic changes happening here when the baby boomers will soon start to retire? I for one may be thinking that they may downsize or pull out some money of the stock market to enjoy their cruises, their savings in retirement.
I agree that all asset classes become overvalued and undervalued and if we can truly pick these times and switch than fortunes will be made. Wealth is transferred not lost.
I personally still think the market is overvalued but once stocks get to about 8.5 PE than perhaps there will be value in buying or getting in. I sold nearly all my stocks in Super in June 2011 just before the correction and have invested in the last 3 years into hard commodities (physical gold/silver) for insurance.
As for skater, well the history is full of happenings, just study it, we had recessions, depressions, stock corrections (1987, IT Bubble), GFC, wars, QLF floods, now Europe and US, etc.... So it depends how you see the day, whether partly sunny or partly cloudy, I choose to see it partly sunny and you obviously see it partly cloudy. What's the point of worring about the things I have no control over it....
Yes, retailers are down, as Internet shopping is advancing, I for one have discoverd it, so the whole new way we live is changing, as it had for many years before.
Am I investing, well, you bet, as the cycles come and go, assets become overvalued and undervalued, and the time just passes by....
Remember, you have to be in it to win it...So good luck to you all.

Thats a great point MIW, probably one that deserves its own thread?? Happy to start if off and hear your and other forum members views...

 

[Aaron_C]

I agree that all asset classes become overvalued and undervalued and if we can truly pick these times and switch than fortunes will be made. Wealth is transferred not lost.

I have to disagree here. in any 'market', whether it be property, equities etc, it is all 'funny money'. If BHP has 1 billion shares on issue, and the last trade was $40, then BHP is now 'worth' $40bn. If tomorrow, it only sold for $30 per share, it is only 'worth' $30bn. But nothing has changed. A BHP share is still a BHP share, but each shareholder has just 'lost' 25% of their 'value'. So value has been lost. I could transfer one BHP share for $30 and wipe off $10bn of stock market value by myself. Where'd the $10bn go? It never existed...

This just demonstrates that wealth is an illusory concept. The only thing that is 'worth' anything stable is cold, hard cash. Even precious metals like gold or even jewels like diamonds have their 'value' fluctuate in absolute terms each and every day. So don't put too much reliance on what your assets are 'worth' because it's all based on the last sale price.

 

[tcocaro]

Tell that to the americans.

There is nothing 100% stable in this world, just varying degrees of it.

The only thing that is 'worth' anything stable is cold, hard cash.

 

[hobo-jo]

This just demonstrates that wealth is an illusory concept. The only thing that is 'worth' anything stable is cold, hard cash. Even precious metals like gold or even jewels like diamonds have their 'value' fluctuate in absolute terms each and every day. So don't put too much reliance on what your assets are 'worth' because it's all based on the last sale price.

WTF?? LOL.

Cash is only as reliable as the central bank/government behind it. I don't watch much local politics, but from the snippets I've seen our current government it looks more like a circus act than those prepared to sensibly run the country and the RBA has diluted the worth of our currency heavily over the past decade, as badly as most other central banks.

The only things that can be counted on absolutely (as having value) are unencumbered physical assets in your possession whose attributes can't be changed from afar.

But I do agree with tcocaro that no assets can be relied on as having a stable worth in these turbulent times (including the metals).

 

[Jaggannath]

Totally agree - there are no "mistakes" only valuable learning opportunities - and if you don't learn from it, you are supplied the lesson again!

haha love it!

 

[Jaggannath]

The only thing that is 'worth' anything stable is cold, hard cash. Even precious metals like gold or even jewels like diamonds have their 'value' fluctuate in absolute terms each and every day.

Tell the Germans of the Weimar Republic that, being paid by the wheelbarrow load of Reichsmarks. And we've all seen the inflation in currency of Zimbabwe, same again.

Personally I'd rather have metals and precious gems, worst comes to worst at least if I have metal I can make a weapon and rob people

 

[Deltaberry]

WTF?? LOL.

Cash is only as reliable as the central bank/government behind it. I don't watch much local politics, but from the snippets I've seen our current government it looks more like a circus act than those prepared to sensibly run the country and the RBA has diluted the worth of our currency heavily over the past decade, as badly as most other central banks.

The only things that can be counted on absolutely (as having value) are unencumbered physical assets in your possession whose attributes can't be changed from afar.

But I do agree with tcocaro that no assets can be relied on as having a stable worth in these turbulent times (including the metals).

No that's also wrong.

Your 'physical assets' (and I put this in inverted commas for a reason) is actually just a piece of paper which leads you and others to believe you 'own' the asset. In a collapse of social order, all other would need to do is take a sledgehammer out and bang your head silly until it comes out of your other end to claim your land. That's how much your physical assets are worth.