If we look at stock markets around the world you will see investors regularly selling assets in a particular business sector and reinvesting in what many see as the next growth area. While selling stocks and shares is a lot simpler than switching property assets, have you ever switched your property assets between different countries? Is it something you would consider?
Lethargic investing causes a drag on performance
Those who have built up successful property investments over the years will likely have assets they have held for a long time. Sometimes we get attached to specific markets or specific assets when the more active investors should possibly be looking at switching their exposure in the longer term. Nobody is suggesting that you should switch your exposure on a regular basis but there is an argument for moving between different markets when long-term situations change.
Even if you are able to increase your exposure in growth markets, if you have long-term assets which have perhaps seen their peak growth rate then this could cause a drag on your performance. It may well give you some backbone, it may well give you long-term confidence but are you maximising the returns available in the market at the current time?
Drip feeding assets
When looking to increase, or even decrease, your exposure to a particular property market you will likely need to do this on a drip feed basis. Slowly reducing your exposure in one area, and increasing in another, will in the medium to long term rebalance your portfolio in the direction you want. Short-term movements in either market may well be disappointing but as long as the long-term situation remains solid then you will benefit in years to come.
Hindsight is a beautiful skill because how many of us have thought “I wish I had invested more” in markets which were moving higher? The fact is that if you have any exposure in a market which is moving higher, and confidence is returning, then drip feeding more investment on the way up is not necessarily a bad thing. The more confidence you have in the long-term performance of this market the more likely you will make an acceptable long-term return. Nothing happens overnight, nobody can foresee the short to medium term future but very often long-term trends are easier to forecast.
Courage of your convictions
How many times have you looked at property markets around the world and for example thought “The UK seems toppy but there might be recovery potential in Spain”. The likelihood is that many people reading this article today will have had similar thoughts but will probably do nothing about them. In years to come they will look back, kick themselves and wonder why they missed that “no-brainer”. Having the courage of your convictions is simply the end process of a detailed and in-depth research into markets of the future. It is not about a gut feeling, it is not about taking unacceptable chances, it is simply investigating the facts and figures, arriving at a decision and having the courage to follow that through even if others do not necessarily, yet, agree with you.
The worldwide property market has more than its fair share of investors with good ideas but a lack of confidence to follow through with them.