Is it a Good Time To Invest? No Really, Is It?

By
Real Estate Agent with Scott Owens Limited

I admit that I don't know much about the stock market, but it seems to me that the time to invest is when it is down (as in "now"), in order to make a large return when the market recovers.  However, whenever I see a blog or news article about the current financial situation, the consensus seems to be that we get out of the market while the getting is good.  One would think that we had never seen bad times before; we all know that this is NOT the case, and that the economy has been in bad shape on previous occasions. 

 

History has also proven that the economy usually recovers in better shape than it started out in.  Consider that on:

October 19, 1987 (Black Monday), the DOW averge closing price was 1738.74 (Down 23%).  One year later it was up 23%; and it was up 54% the year following that.

August 7, 1990 (Five days after Iraq invaded Kuwait), the DOW averge closing price was 2710.64 (Down 10%).  One year later it was up 12%; and it was up 23% the year following that.

April 19, 1994 (Rising Interest rates in the USA), the DOW averge closing price was 3619.82 (Down 23%).  One year later it was up 16%; and it was up 53% the year following that.

August 31, 1998 (Five days following the collapse of the Russian Ruble), the DOW averge closing price was 7539.07 (Down 19%).  One year later it was up 44%; and it was up 49% the year following that.

March 11, 2003 (US Invasion of Iraq imminent), the DOW averge closing price was 7524.06 (Down 36%).  One year later it was up 35%; and it was up 43% the year following that.

Armed with this knowledge, I feel positive that it is a good time to invest...but then again, I have already admitted that I am not a financial guru.  There are many people out there who are wondering the same thing.  So, my question is:

Should we be bailing out of todays market, or is there an opportunity here that we should be seizing? 

Comments (15)

David Hubbard
Premier Denver Homes - Highlands Ranch, CO

Absolutely, it is a good time to invest, in stocks or in real estate. The foreclosures in Denver have created some real bargains.

Oct 23, 2008 11:27 AM
Alisha Harrison
John L. Scott, Belfair - Belfair, WA
Allyn, Belfair and Hood Canal real estate expert!

I'm not a financial guru either... but I am inclined to agree with you. I think this is a great time to get into the market, if you can afford to invest some money and not touch it for awhile. Now, if only I had a magic 8ball to tell me what to invest in. Well, besides real estate which I am actively doing!

Oct 23, 2008 11:29 AM
Dean Moss
Dean's Team - Keller Williams Realty Partners Chicago IL - Chicago, IL
Dean's Team Chicago IL Real Estate Team

Scott -

I would agree it is a very good time to invest. 

Bringing the comparison to the Real Estate Market - when home sales tanked during the High Interest Rate 1980's, or Recessionary Early 1990's - prices were low, folks were crying the blues.

If you had bought considerable investment property during these periods - where would you be today?  Would you have regretted your investment?  Didn't think so!

Invest - but INVEST WISELY!  Get good advice from professionals who - hopefully - know what they're doing!

DEAN & DEAN'S TEAM CHICAGO

Oct 23, 2008 11:29 AM
Alan May
Jameson Sotheby's International Realty - Evanston, IL
A moving experience!

<--- not a financial guru, or one who even understands the stock market.

But I have to agree that it seems a good time, while prices are low.

Oct 23, 2008 11:32 AM
Patty Luther
RE/MAX Rock-n-Roll Realty - Lewiston, ID
Lewiston ID Real Estate, Idaho-Washington

' ANY MARKET IS THE RIGHT MARKET '

Business card

Patty of Rock-n-Roll Realty

Oct 23, 2008 11:33 AM
Li Read
Sea to Sky Premier Properties (Salt Spring) - Salt Spring Island, BC
Caring expertise...knowledge for you!

Thoughtful post!     I do think the contrarian point of view is often the successful one -- don't follow the lemmings over the cliff, but turn in another direction and find the arrow to success.

Oct 23, 2008 11:44 AM
Justin Ukaoma
Vizion KC - Kansas City, MO
Kansas City Real Estate Investments

Its a great time to invest in Real Estate.  Even flips.  One of my clients just closed on a flip.  Thanks to us he profited $13k in only 60 days. Not a bad return on your money.

 

Oct 23, 2008 03:56 PM
Scott Owens
Scott Owens Limited - Halifax, NS
REALTOR

David - I think there are a lot of areas with outstanding deals - now all we need is the cash to get in on them.

Alisha - Oh, the old "Magic 8-Ball" investment strategy - let us know how it works out (probably just as well as other method any right now lol)

Dean - Thanks for the comparison to real estate.  I wasn't around in those days, but I bet those who were, and were able to capitalize on the situation, made a ton of cash.  And probably still are...

Alan - Let's hope we a re right.

Lewiston - Certainly a positive outlook...rock on!

Li - And mom said that I was wrong in being so contradictory.  Ha! 

Justin - Scary time to be a flipper, I would think.  Congrats on helping your client be successful!

 

Oct 27, 2008 01:42 AM
Lizette Fitzpatrick
Lizette Realty - Richmond KY - Lexington, KY
Lizette Realty, Lexington KY MLS - Kentucky Homes

It's a great time to invest in Kentucky real estate. We haven't felt all the pain of most of the US. Thanks for stopping by my blog to comment on my Haunted House! Happy Halloween!

Oct 31, 2008 08:43 AM
Sharon Paxson
Compass - Newport Beach, CA
Newport Beach Real Estate

Personally - I think it is a great time to invest - in stock and in real estaet. There are some unbelievable buying opportunities right now.

Nov 01, 2008 04:43 AM
Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

I think now is a great time to invest.  The problem for me has always been that I have no money to invest when the market is nearing the bottom.  I did sell some stock for my daughter's college money last summer that was 4x higher than it is currently.  At least finally I sold something high.

Nov 02, 2008 03:18 PM
Scott Owens
Scott Owens Limited - Halifax, NS
REALTOR

Sharon - I think almost all of us in the industry have the same opinion about investing right now. I wonder why the consumers don't share it.

Tammy - Congratulations on your sale (lol).  I share your pain regarding lacking the funds to invest... there are so many opportunities around here...

Nov 02, 2008 09:52 PM
Chuck Willman UtahHomes.me
Utah Homes - Alpine, UT
Utah Homes

Though no one knows the future many investors are saying it's a good time. I'm inclined to side with them.

Nov 03, 2008 01:45 PM
Sharon Alters
Coldwell Banker Vanguard Realty - 904-673-2308 - Fleming Island, FL
Realtor - Homes for Sale Fleming Island FL

Wasn't it Warren Buffett who said, "invest when there's blood in the streets?" Now is an outstanding time to buy - especially if you plan to hold on to real estate or stocks for 10-15 years. Very insightful post, Scott.

Nov 06, 2008 01:11 PM
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • GRI • HAFA • PSC Calabasas CA

Fast forward to 2016: 

Prices are increasing, with median home prices rising to new all-time highs in some areas. New home sales are at a seven-year high on strong demand, and foreclosures are at the lowest level since at least 2000. Moreover, financing options available to investors have expanded dramatically so investors don’t have to take out a typical mortgage from Fannie Mae and Freddie Mac to buy a rental property.

Sep 06, 2016 06:26 PM