How do we start fresh in 2009
How do we start fresh in 2009!
2008 is a year that most of us would like to forget. From rich to poor, all of us lost money in all forms of investments. In the past, a lot of us would blame our financial advisors or stock brokers for we would have to rely on their expertise and judgement. With the technology of the internet, we were able to do our own research and we still could not avoid the losses.
Do u realised how much the global stock markets have plunged in 2008? To name a few:
U.S. Dow Jones 34%
U.S Nasdaq 40.5%
Canada TSX 35%
Japan Nikkei 42%
UK FTSE 30%
China SSE 65%
Hong Kong Heng Seng 50%
How can we start fresh again in 2009? Where can we see safety and value for our investment? Well, it depends on our age. Some might want to take advantage of the Tax Free Saving account which limited to $5000 per year. Some might want to keep their stocks and wait for it to come back. For retiree, they might want to put in SAFE investment like GIC. The rates for GICs at the moment is between 1% to 1.2%. Lastly, some of us would put money back to real estate.
Why would you buy a revenue property now when you feel the market is not going anywhere fast?
Well, history has taught me that when the market peaks then experiences a recession, it takes an average of 7.5 years before the peak property price is surpassed. This happened in 1981 to 1988 and in 1995 to 2001. The smaller recession in 1990 took 2.5 years for the peak property price to be surpassed. These time perods may be shortened if the property is in a premium location. For eg. there's a 1BR apt at the Shangri-La building in Downtown Vancouver sold in December in 4 days at full price! Sold at $719 per s/f. Due to the low mortgage rates currently available to the home buyer, each mortage payment made will pay off 30% to 40% of the principal owed or in other words, increase your equity just like an automatic savings account with a return on investment of 5% to 7%.
