2011 - a Great Year for Your Financial Future...

If youre like most, you may still be clutching your wallet and recovering from December's holiday madness. However, it's the perfect time of year to rethink your financial future and look ahead to 2011. According to financial expert Eric Tyson, author of Investing For Dummies and coauthor along with Robert Griswold of Real Estate Investing For Dummies, by doing so, youll open yourself up to some great investment opportunities. By taking an optimistic investing approach during the upcoming year, you can actually profit from the recovering economy.

1. Take advantage of low prices. Instead of looking at deflated housing and stock values as a bad thing, look at them as opportunity makers. Because prices have fallen, these investments are more affordable and you can buy now and watch current values increase over time. Take real estate, for example. Recent data out from the National Association of Realtors (NAR) shows that their home affordability index (HAI) is at the best level in more than three decades. If you have good credit and can put down at least 10-20% of the price, investing in real estate is actually more viable an investment than it has been in years.

"The same is true of stock prices," says Tyson. "Because of the downturn, many strong companies have stocks that are undervalued. If you buy these stocks now, as the market stabilizes and things improve, values will increase and your portfolio will be the benefactor."

2. But look before you leap. In other words, do your homework before you throw down the cash, says Tyson. Some companies stocks are low for a reason. Before choosing which companies you would like to invest in, you have to do the research and make sure that they are fundamentally strong. Where real estate is concerned, there are still areas where properties are overvalued, so youll have to do the research to make sure you buy in an area where prices have already fallen in line with market fundamentals.

"These caveats are just reminders that you shouldnt go into any investment without doing your homework first," says Tyson. "Making irresponsible investment decisions is what created the problems we are having. By researching your options, you will be able to make sounder, more profitable decisions."

3. Be careful where you get your advice. Misinformation abounds. There are a lot of pundits and so-called financial experts out there who are giving questionable advice and are making terrible predictions, says Tyson. Whats more, their past track records indicate that we should take their words with a substantial grain of salt. "Financial pundits are a dime a dozen right now," says Tyson. "Be very careful about whose advice you follow and whose economic predictions you buy into.

4. Keep thinking long-term. If you make investments thinking you are going to see quick returns, you will be disappointed. Where real estate is concerned, the days of buy it, flip it and sell it quickly for a huge profit are over. What you can do is buy property now--particularly in areas where its now properly valued and even undervalued--and watch its value accrue over time as the market stabilizes and improves. You should take the same approach to any stock investments you make.

 

Phyllis Lerner, Realtor

Broker / Owner

http://westchester-real-estate.us
914-438-7556

Voted 2010 FIVE STAR Real Estate Agent by Westchester Magazine