While multi-billionaires Donald Trump and Warren Buffett are touting real estate and stocks (respectively) as great investments now, the problem seems to be that John Q. Public still can't afford to buy a primary residence, much less invest in property or stocks! Both can be an uncertain prospect to most people. And for those who are truly watching the stock market swoop and dive, there is far too much volatility to want to put money into either type of investment.
What one has to remember is that both real estate and the stock market can be used as long term investments. Buy cheap and sell high is the adage Warren Buffett used in a recent interview. When real estate inventory is high, prices start to come down and buyers can buy within their means. As buyers buy, inventory dwindles, prices start to rise, and -- voila! -- sellers start cropping up and more homes are being sold again, now at higher prices. This is an example of a normal real estate cycle, otherwise known as the laws of supply and demand. It is important to note however, that these cycles normally take years to develop.
The stock market can be a little faster to develop cycles, depending on the companies in which you invest. The long term investments generally show little variation, even in volatility such as we have now. Start-ups require a lot of research before you invest and can be very risky. Generally, the more stable the stock values are, the lower the risk.
As we all know, any investment is a risk. Don't let anyone tell you differently. Our economy is fairly uncertain, to be sure. And whether the analysts you listen to are professing sunny or gloomy future, you should only invest when you can afford it. However, when the billionaires are talking about investing, it just might be time to consider reinvesting in your future.
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My current listings on Kauai:
MLS # Tp Taxkey Price Location Land area Details
206433 SH 4-2-6-5-14-23 $375,000 Kuhio Shores At Poipu #204 854 #204 1/1
213693 T 4-2-6-5-14-23 $755,000 Kuhio Shores At Poipu #204 854 #204 1/1
213315 T 4-5-4-5-24-37 $648,000 Nihilani At Princeville Resort #13A 1,874 #13A 3/2.5
216647 RS 4-5-4-18-17 $720,000 4725 Emmalani Dr 10,248 sqft 1,388 2/2
196353 RS 4-5-4-15-10 $960,000 3829 Haulani Pl 11,502 sqft 1,884 3/2
