Well, I have nothing against RE as an investment, its just that unlike the stock market for me, I've seen this movie before with RE. We had the most astronomical RE bubble in California in 89-90, you couldn't believe it. Basically, at that time (which didn't last too long- just like the internet bubble, 3 years or so and it was over)- virtually no working person in N Ca could buy a house. You had to be a rich foreigner with a ton of cash, or have equity from another house or something. Interest rates were still high and I remember a flatlands home in a suburb around here selling for $700K then (a shocking figure at the time). I don't think the rest of the country had a RE bubble in the same magnitude as CA, because ours was caused by pacific rim money and some other anomalies. Then, a brutal (and I do mean brutal) crash. Finally around 1995 houses started selling again but it took a few more years to make their prior highs. So a 10 year retrenching.
Thats what I think will happen to tech stocks- my belief is that we have seen the lows, now a little more time of flat and then great gains to be had because the consolidation has been so brutal the remainers will have pricing power. Just look at how the web has changed this war, and the stocks that caused the bubble are back in a bull already (amzn,yhoo,ebay). So I'm fine with buying equities in a big way here if you have time to wait it out. My guess is, that in retrospect people will look back on this bear mkt as just another mkt event vs. the economic catastrophe that some of the real bearish pundits are predicting. We had that same end-of-the-world bearishness in 1990, too. Those same pundits stayed bearish all through the 90s come to think of it! LOL.
Thats a great return you have on your fixed income. Hmm I would have looked into that myself had I known about it a few yrs ago but right now I'm buying equities again so thats where my cash is going. 8% pretty good though. |
