Timing the Market vs. Long-Term Investing

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Apr

26

Timing the Market vs. Long-Term Investing

Because I have had success in the commercial real estate investment business, I am often asked, "What is your assessment of the real estate market outlook?".

This is a question that I have never given a great deal of importance to in my 44 year investment career.   I have always presumed that  there will be major economic shifts causing significant ups and downs in our business.  This has been amply proven by the disastrous rise in interest rates  (20.5%) in July of 1981, the real estate recession from 1990 to 1995, and the historically bad 'great recession' of 2008.  Of course there have been  times of expansion and growth in between these difficult periods.

Notwithstanding the fact that it is nearly impossible to time the market, investing for the long-term has worked well for me and I advocate that you do the same.

Values tend to go up more than down over time so the longer you hold on to a quality property there is a higher likelihood you will increase your cash flow and equity.  Trading can result in a lot of "wind".  After returning security deposits and paying commissions, selling costs and taxes, much of the equity you have built disappears.  This is not the best way to leverage your equity to build real wealth.

While there is no set formula for timing the market, a disciplined long-term investment strategy has served me well over decades of successful investing.  Be patient and good luck!