FLORIDA INVESTMENT STRATEGY - INVESTING SAFELY IN A SHAKY ECONOMY
Stocks, bonds, currencies, commodities, buildings, houses, land,...?
Investing safely in today's economy is an uneasy task: the past became untrustworthy and the
future is uncertain. While in turmoil lie opportunities, a normal reaction is to wait until the dust
settles. Unfortunately, waiting is a major mistake since (1) it is still betting on the past, and (2)
unique opportunities will be missed forever. With security as a key factor in mind, here is FSI
investment strategy recommendation.
Do invest in what will be valuable when the market turns around.
What will thus be valuable then? Let's address that question logically.
- Investment: financial paper or tangible assets?
Because of their current extreme volatility, one should avoid all investments materialized with
ink on paper, such as stocks, bonds or currencies. Instead, one should consider tangible
assets as they will resist better during the chaos. Moreover, today some assets can be
acquired at bargain prices.
- Tangible assets: commodities or real estate?
Gold, oil and other some other commodities have been fluctuating in the opposite direction
of the dollar. Prices are high and their market changes daily in unpredictable directions. Real
estate has always been where wealths were made, especially during troubled times. Today,
one can take advantage of heavily discounted properties.
- Real estate: commercial or residential?
So far, the commercial market resisted relatively well in the current economy and bargain
prices cannot be found there. Moreover, let's keep in mind that commercial real estate
requires important investments. Today, while it is a sleeping gold mine, the residential market
is still on hold.
- Residential: home or land?
Some homes and land can be acquired at about half their recent peak values. Now is the
time to buy, even if prices might drop a little more. Once the market becomes aware of the
buying time, there will be a rush on the bargains and they'll be picked up fast. Homes require
a lot of management (finding tenants, collecting rents, maintenance, insurance, ...). Land is
management free and moreover, investments are in much smaller amounts.
- Land: raw or subdivision lot?
Once the market turns around, builders will need developed lots right away. Raw land will
have to wait longer than fully developed lots as they will need some time to be ready. So,
the answer is investing today in fully developed lots in marketable existing inhabited
Subdivision lots - Evaluation criteria (outline)
Marketability, profitability, practicality
How to evaluate marketability?
- Location, location, location - Inhabited area. First-time homebuyers
- Market growth
How to evaluate profitability?
- Appreciation - Larger than carrying and closing costs
- Exit strategy
- Return on investment
How to evaluate practicality?
- Management - Maintenance free better than ongoing management
- Stability - Land will always be there. Permanence in disasters
- Ownership - Fully owned free and clear. Own it and forget it!
This outline will be developed in the next article. In the meantime, do not hesitate to contact us
to learn more about safe and profitable investments.
All the best,