Real Estate Timing Report
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Real estate timing for maximum profits
Questions and Answers
1.
Your “Vital Sign” indicators give “advance notice” of approaching
trend changes in the real estate market. How
can they identify a change in trend before
it actually happens?
By using the statistical tool called “momentum analysis” – which is based on laws of physics that govern the motion of physical objects -- it’s possible to scientifically measure when a market up-trend is decelerating instead of accelerating. Therefore, it’s possible to detect market weakness even when prices are still going up.
That’s what happened in the “1990 San Diego Real Estate Crash.” The market was still in reasonably good shape in January 1990 when the “Real Estate Crash Index" issued a “Sell Signal.” It wasn’t until 3-6 months later that prices actually started falling. Investors had ample time to sell and avoid the market collapse.
The reverse holds true during market downtrends. These timing indicators identify when a downtrend is decelerating – which is a sign of market strength – immediately before prices start rising. This gives investors time to buy low and catch the next market surge.
By
the way, momentum is the most powerful
market force. Some of the best
traders on Wall Street use “momentum analysis” to manage money.
It’s a proven tool for making consistent profits.
Sure. Again . . . momentum is based on the laws of physics. Let’s say an automobile is traveling in a certain direction. Before the automobile can reverse its direction, it must first slow down (decelerate) and then stop. Only after it stops, can the automobile start traveling in the opposite direction.
This is the same with the real estate market. Momentum analysis detects whether the market is slowing down when it is traveling – or “trending” -- in a given direction. Looking at the Real Estate Crash Index in the Real Estate Timing Report a “change in trend” is signaled only when the “0” line is crossed . . . meaning the market trend has slowed to a stop . . . and is now trending in the opposite direction.
Identifying “changes in trend” in real estate is where the greatest profits are made.
3.
Can your market timing indicators also determine what the real estate
market is going to do one, two or five years in the future?
No. The “Vital Sign” indicators can only look 3-6 months ahead. They are like headlights on a car. They can see down the road but not around the corner. These market indicators are based on scientific principles that measure the acceleration and deceleration of the trend of the market. They are not based on crystal ball gazing . . . or watching the movement of the planets and stars.
Also
be clear about this: the Real Estate Timing Report is not a “how to
get rich overnight” publication. It
does – however – do this: it shows you how to make more
money faster
. . . because of accurate market timing.
The key to building wealth is to protect your capital from loss and wait patiently for the right opportunity to make extraordinary gains.
5.
If an investor does not buy at the market bottom during the current
market cycle, is it still safe to invest at a later time?
Absolutely. While buying low at market bottoms and selling high at market peaks yields the greatest returns, investors have another good option: to buy during a rising trend . . . and sell later at even higher prices. You can wait until a market up-trend is well underway before buying. Real estate trends normally last for 3-5 years. Investors – therefore -- can safely buy anytime during a market up-cycle . . . and make a profit . . . as long as they sell before the market down-cycle begins.
6.
What is the biggest mistake an investor can make in real estate?
Fighting the trend of the market usually results in disastrous defeat.
7.
Should homeowners follow the “Vital Sign” indicators as closely as
investors?
I believe so. A person’s home is normally his largest financial asset. By being alert to market trends, smart homeowners can factor this kind of information into both their short-term and long-term goals.
For example, a first time homebuyer might not want to buy during a market downtrend. He might want to rent and wait until the market hits bottom. Then he can buy at even cheaper prices. Or a homeowner might want to sell – and then rent – after prices have shot up and the market has peaked. With the new tax laws, homeowners can sell their home every two years and the profit is tax-free forever. This is a huge tax benefit worth considering.
I think homeowners – as well as investors – should exploit good market information.
8.
Under what conditions is real estate a great investment?
When you catch a real estate up-trend, you have appreciation and leverage. It doesn’t get any better than that.
9.
What is the biggest difference between the most successful investors and
those who lose money?
The most successful know when to sell. They know when it’s time to take profits and avoid market downturns.
10.
Why is avoiding a declining
real estate market at the pinnacle of decision-making?
There are two reasons that come to mind. First, because you lose money. Because of the debt leverage built into the U.S. economy and real estate investments, wealth gets destroyed much faster than it is built up. It might only take a few of years to tear something down that took a lifetime to build. Second reason? You sleep better when you avoid market declines.
11.
What is the most important advice you would give the beginning real
estate investor?
Start small and don’t take big risks. Invest for short-term opportunities – like buying undervalued properties and selling them for fast profits. Build up your capital before you invest for the long haul.
12.
Most investors know that timing is important.
What are the best real estate indicators to follow?
The “Vital Sign” indicators in my market letter are superior to any other market timing indicators I am aware of. They literally plug you into the market . . . and unequivocally answer the question that all investors should continually be asking themselves: “What is the market telling me to do?”
13.
Are there any real estate indicators that you consider over-rated?
“Time on the market” statistics are often touted – but in reality, they are almost worthless. By measuring the time it takes for a home to sell, it is designed to tell whether the real estate market is getting stronger or weaker. However, because these statistics are so easily manipulated by agents and sellers . . . they can no longer be trusted.
14.
When is it easiest to make money in real estate?
During inflationary times. In the 1970’s, the price moves were so large that all an investor had to do was buy a piece of property in a good location, wait a few years . . . and then sell it for a big profit. Even if you paid too much, it wasn’t long before the inflationary price increases covered up your mistake . . . and you still made a profit.
With low (or no) inflation, however, it isn’t as easy. You can lose money if you overpay, or buy – or sell – at the wrong time. With little or no inflation, it becomes more important that you only invest with the trend. Timing is much more critical.
15.
When is it most difficult to make money in real estate?
During deflationary times. When prices of almost everything are falling – including real estate – the place to be is in cash. That’s what occurred during the Great Depression, which started in 1929 and lasted almost 10 years. Could it happen again? Hopefully not . . . but if it happened once, I think logic tells you that it could happen again.
16.
What are the traits of a good real estate investor?
The most important trait is to have a proven and tested strategy – with clear-cut rules to follow. Second, you have to have discipline . . . to follow your strategy. Third, you have to have patience. You have to wait for the right opportunity and then stay with it until it ends. Fourth, you need to be able to control your emotions. Fifth, you need a strong desire to make money.
17.
What is the “Buy Low, Sell High” investment strategy?
It’s a strategy that is based on identifying real estate trends. Using the “Vital Sign” indicators, it keeps you invested in the real estate market during the up-trends until there is evidence that the trend has changed. Then it tells you to sell.
18.
What is the “Early Warning Alert” indicator?
It gives you “advance notice” of likely major trend changes in the “Real Estate Crash Index." Because the "Real Estate Crash Index" is also a leading indicator to major changes in trend, the “Early Warning Alert” indicator gives investors even more time to prepare for major trend changes in the real estate market.
The three biggest are fear, greed and ego. They all sabotage your efforts to make money. How well you overcome these emotional weaknesses will usually determine how successful – or unsuccessful – you are.
Not letting your emotions come into play is always a constant struggle. That said, having a strategy – such as the “Buy Low, Sell High” strategy -- for determining when to buy and sell is essential. It keeps you objectively focused.
Next, practice this to help keep your emotions in check: “Don’t think about what the market is going to do . . . because you have absolutely no control over that. Instead, think about what you are going to do in response to the market.” If you do this, most of your problems are solved.
The temptation to follow the crowd. Investors have to do what is correct rather than what feels comfortable. Even though the markets look their very best when prices are soaring, this is often the best time to sell. And when the market couldn’t look worse – when the “blood is running in the streets” as they say – this is usually a market bottom and the best time to buy.
Someone once said: “It is a curious fact of human nature that nobody wants anything when it is cheap and everybody wants it when it is expensive.” To be a good investor, you have to be a contrarian. This is especially true at major market turning points . . . when the most money is made . . . and lost.
22.
What “market truth” will make you a consistently
successful real estate investor?
That’s easy.
1. The market is always right.
2. You aren’t.
In other words, don’t fight the trend.
23.
What are the most important rules of real estate investment?
Make sure you have the edge . . . that your approach gives you an advantage for beating the market. Risk control is also critical. Knowing when to sell is more important than knowing when to buy. It’s worth repeating: you have to avoid the bad markets. Like any Super Bowl champion tells you: a great defense is more important than a great offense.
Before you buy a property, you have to ask yourself: “If market conditions change, what will I do to avoid losing money?” When you can answer that question, you should be in good shape.
24.
What should everyone understand about investing in real estate?
That you can lose your money if you don’t know what you are doing.
Buying or selling some San Diego real estate in the next 3-6 months? CLICK HERE to learn how you can find out what the “Vital Sign” indicators are saying whether prices are likely to rise . . . or fall?