Planning on buying that dream home?
1. Know your budget. Easy right? Now stick to it!
2. Make sure you have all your ducks in a row before you start house hunting. The number of home purchases that fail at the last minute due to delays in obtaining finance is staggering. If a seller has two identical offers but only one buyer has pre-approval, they will accept the offer from the buyer with pre-approval.
3. Take your time. Make sure the house is more than just a pretty face. Is it big enough? Can you manage the yard on your own or will you need to get the Backyard Blitz team in every 12 months? What’s the lighting like?
Dreaming of Downsizing?
1. Your home is not worth as much as it was a few years ago. Accept that. If you have a choice, avoid selling until the market picks up.
2. If you have to sell, consult with your agent or arrange for a valuer to come by and look at the property. Many real estate agents say clients often get offended when they suggest an asking price that is much lower than the homeowner expected. Don’t be offended. It’s much better to face reality than to let your home sit on the market for months or even years because the property is overpriced.
3. Make sure your home is well presented for all inspections. Ask your agent for feedback from people who have looked at the property. You may love the hand stenciled border in the kitchen but most buyers just see it as something they need to fix when they move in.
Getting into the Market:
1. Consider Dollar Cost Averaging – The technique of buying a fixed dollar amount of a particular investment on a regular schedule, regardless of the share price. More shares are purchased when prices are low, and fewer shares are bought when prices are high.
Eventually, the average cost per share of the security will become smaller and smaller. Dollar-cost averaging lessens the risk of investing a large amount in a single investment at the wrong time.
For example, you decide to purchase $100 worth of XYZ each month for three months. In January, XYZ is worth $33, so you buy three shares. In February, XYZ is worth $25, so you buy four additional shares this time. Finally, in March, XYZ is worth $20, so you buy five shares. In total, you purchased 12 shares for an average price of approximately $25 each.
2. Think Dividends
The stock market is, by nature, somewhat capricious. But if a portion of your portfolio contains dividend-paying investments, you can expect that at least a portion of your returns will be more predictable than the day-to-day value of your stocks.
“Capital growth is not where it’s going to be. We’re only expecting 3 percent (gross domestic product) growth this year, and I don’t see that changing over the next few years. Dividend income is where you have to focus,”
“Investors should buy companies that they like, use often and would recommend to others — that pay a dividend above 6 percent of which there are many that do right now.
3. Trust History – This time is no different.
Every period of economic expansion and contraction has a different story, but people react to them in similar fashion: mostly irrational with a touch of shortsightedness.
Whether it’s a bull market or a bear market, it will eventually end.
“Trust the concept of a regression to the mean,” says Robert Fragrasso, “An investor should maintain discipline — total asset allocation discipline — and continue to invest discretionary money into their portfolios.”
“Trust the fact that this time is not different; it just comes packaged differently. And take advantage of it. People say, ‘Boy, I wish I had $1 million to invest back then when it was low.’ Well, you had what you had; did you invest it?”
Call to action; if you want more information or to take on any of these strategies call Brent or Lauren – 40412055.
