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The "holding cash" part of your statement is correct for anyone who is looking to maximize return and willing to take on additional risk; "crappy time to buy real estate" is too generic a statement.
Some real estate invesyments will always make sense and some...not so much.
I'm in cash, bonds, have a few rental units and I have a second small business. The RE is enough risk for me but the return on the RE portion of my portfolio balances out the cash and bonds; those returns, however, can go south in a hurry (that's the risk).
Diversify enough to let yourself sleep at night. Sorry, standard advice, I know but it's standard for a reason.
Done!
2010 Nov 1, 1:29am
A bad time to Hoard cash?
Poppy Cock, the only fools that believes that are the same Idiots that blame everyone NOT buying Gold, for Gold not being $3,000 an oz right now.
I've been hearing that same shitty song for over three years now. Meanwhile, I bought a house this year, and have never been more financially stable in my life with more money in the bank.
middleman
2010 Nov 2, 10:44pm
Meanwhile, I bought a house this year, and have never been more financially stable in my life with more money in the bank.
ditto
I'm in the same boat. I have about 300k cash in the bank, and I'm trying to figure out what to do with it. I could invest in stocks/index funds, pick up some rentals in a state that may be bottomed or close in RE like AZ. Heck I could probably get a beat up APT complex with 300k down, but it would be my first dive into owning a rental, and I'm pretty clueless.
Or I could just hoard for the time being.
But interest rates are so low now. Would it go even lower in the next 3 years?
Personally, I fear just about any investment these days, so I keep most of my life savings in a big metal box full of cash, watching it decrease in value by the minute. Today I got off my ass and sunk 25K into silver stocks and agricultural commodities. This country is already totally fucked economically and will never ever, ever, ever be able to pay the foreign debt. I'm at wits end trying to figure out just when the engine is gonna stall and our economy free falls to a giant SPLAT, and now it won't matter what the hell you own.
We are in similar decision points...have an offer on a triplex less than asking. We'll see. It offers more room for avocation (photography needs room!) We will own free and clear when this house sells and it has income, one or two units depending if we convert to a bigger SFR + 1 BR. Frankly, it is taking too long to wait. 10-15% off a bottom is fine as it is an estate sale eventually. Paying off a mortgage is a kick, like a run on the banks...enough walkaways would do the same thing, no? The gov. seems unable to regulate or discipline a bunch of frauds, the people will eventually as they will have no money to buy. I see a lot of cash trading hands and a little barter starting. In our 70's we'll just be happy and try to provide for our unfortunate demographically challenged progeny. Oh, and the location most important...where we are happiest.
I've been keep coming accross different internet blogs and articles. Some like Patrick.net talk about why it is still a bad time to buy real estates due to the large amount of delinquent mortgages on the bank's back log which will cause home prices to tank for few more years. Some talk about how the Government's bad money policy is creating an environment for hyperinflation coming around spring of 2012 which would make money worthless.
So are you a bigger idiot to buy a piece of real estate (with a good down payment) that's going to decrease in value for another few years, or to hoard the money which becomes worthless with rapid inflation? Tough choices.
If any of you out there have some good ideas on perserving personal wealth (however little or much one has), please feel free to share.
#housing