the Wealthy Canadian

A bear market is characterized by widespread pessimism. This environment causes investors to either divest themselves of their portfolios entirely or become far more conservative/blind in their investment strategies. This can be roughly compared to the housing market as well. When looking at the health of the market, buyers (like investors) sometimes mistakenly take these downward trends as bad omens and discontinue or radically modify their investments. Running scared is not the answer. Real estate is a real commodity, and despite dropping resale values, the market corrects itself over time. Due to uneducated speculation, many investors do lose everything, but not everyone is prone to these extended dips.

The smart real estate investor knows that no matter how far the market drops, people still need somewhere to live and will always have that need. This proves that in the long run, real estate is anything but speculative. However, as with the stock market, if you make uninformed and rash investment decisions, you are likely to fall victim to market fluctuations and lose your shirt in the process. If you keep abreast of market indicators and modify your real estate investment portfolio to match current trends without losing the base of your investment strategy, you can enjoy continued growth in the lean times.

So, as a concluding point to this series of articles, during a depressed housing market, smart real estate investors move ahead with acquiring properties because they know that the market in time will correct itself and continue to increase, whether it be five, ten or fifteen years down the road.