(Source: https://fred.stlouisfed.org/series/MSPUS)
That rally ended with the Global Financial Crisis. Home prices declined nearly -20% from the peak in Q1:2007 to the bottom in Q1:2009. If history repeats, US home prices will fall more than -20% to -25% for real estate investors as history has a way of repeating.
US Equity Market May Not Follow Asset Prices Downward As Economy Shifts
I want to urge you to consider how capital works in a shifting global market environment. Capital is always seeking out the best, most opportunistic, instruments for future gains and protection again risks. Even when the markets were turning downward in 2009, a bottom set up in the US stock market long before other assets found their bottom in price. This same type of scenario may play out over the next 12 to 24+ months.
If my interpretation of market conditions is correct and the US Fed attempts to raise rates further to mitigate inflationary trends, it is likely that various asset classes, including real estate, ETFs, and individual sectors will unwind risks (as we are now seeing) and will possibly turn into future opportunities. What was overvalued in the past may turn into an incredible opportunity as capital shifts towards sectors/trends showing opportunities for future ROI.
The current market trends will present incredible opportunities for traders/investors that are able to protect capital, see and understand the risks and opportunities unfolding, and time their investments/trades properly in the markets.
LEARN FROM OUR TEAM OF SEASONED real estate Investors
In today’s market environment, it’s imperative to assess your trading plan, portfolio holdings, and cash reserves. Experienced traders know what their downside risk is and adapt as necessary. Successful traders manage risk by utilizing stop-loss orders, rebalancing existing positions, reducing portfolio holdings, liquidating investments, and moving into cash.
Managing risk and expectations for both investments in real estate and the stock market is the key for long-term success. Do this, and you can avoid the rollercoaster ride of doing nothing to protect your investments.
Successfully managing our drawdowns ensures our trading success. The larger the loss, the more difficult it will be to make up. Consider the following:
- A loss of 10% requires an 11% gain to recover
- A 50% loss requires a 100% gain to recover
- A 60% loss requires an even more daunting 150% gain to simply return to break even.
Recovery time also varies significantly depending upon the magnitude of the drawdown. A 10% drawdown can typically be recovered in weeks or months while a 50% drawdown may take years to recover.
Depending on a trader’s age, they may not have the time to wait on the recovery or the patience. Therefore, successful traders know it’s critical to keep their drawdowns within reason. Most of them learned this principle the hard way.
HOW WE CAN HELP YOU LEARN TO INVEST CONSERVATIVELY
At TheTechnicalTraders.com, my team and I can do these things:
- Reduce your FOMO and manage your emotions.
- Have proven trading strategies for bull and bear markets.
- Provide quality trades for investing conservatively.
- Tell you when to take profits and exit trades.
- Save you time with our research.
- Provide above-average returns/growth over the long run.
- Have consistent growth with low volatility/risks.
- Make trading and investing safer, more profitable, and educational.
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We invite you to join our group of active traders who invest conservatively together. They learn and profit from our three ETF Technical Trading Strategies which include a real estate ETF. We can help you protect and grow your wealth in any type of market condition. Click the following link to learn more: www.TheTechnicalTraders.com
