While there is no doubt that the Internet has opened up a whole host of opportunities for those looking to research new and potentially exciting property markets, the vast majority of investors still tend to go with the old adage “the trend is your friend”. There is evidence to suggest that doing your homework, looking for long-term value and perhaps jumping ahead of the crowd if you have confidence, could be the way forward. So, do you follow the property investment crowd or think for yourself?
We don’t for one moment assume those who follow the crowd do not “think for themselves” but it can be easy to get wrapped up in the moment and follow the trend. Historically those who take a long-term view on potentially difficult short-term markets have created significant returns but it does take bravery.
Are you brave enough to take your own advice?
How many times have you look back at a particular market and thought to yourself, 10 years ago I looked at that market and it looked good value. However, I decided against investing and as ever went with the crowd. This is a commonly occurrence in the investment market because if all investors are moving in a certain direction it is difficult to go against the crowd. It does take bravery, there may be short-term issues and you may have to harbour some losses before the market turns.
Quote from PropertyForum.com : “It may well be that problems within Europe are forcing European and American real estate investors to look elsewhere but there is no doubt that interest in the Asia-Pacific is growing.”
It will be interesting to look back at the European market in 10 years and possibly see Greece, Cyprus, Portugal and Spain riding high again. How many of us will then look back and think if only!
Go with your gut instinct
Trend and momentum investing can pay dividends on the way up but it can be catastrophic on the way down because with momentum, for or against, this can overextend prices on the upside and downside. Sometimes it is better to keep away from these trend markets and look for long-term investments which should always be your goal when looking at property. If you make a short-term return, great, take it and look at the next market but do not enter a new market thinking you are going to make a profit within 12 months.
If you are not yet experienced enough to go with your gut instinct, it may well be that you need the help of financial advisers who can give you the information you require, talk you through the ups and downs of the market but at the end of the day it will still be your decision. You will slowly get a feel for the property market, for the real estate sector and when you start to branch out and do your own research, this is when you could spot hidden gems before the pack mentality kicks in.
We are not suggesting there is anything wrong with making money by following the trend but there is also nothing wrong in doing your own research and taking a long-term view on a potentially difficult short-term market. History shows us that the likes of Warren Buffett, steadfast long-term investors, do tend to make the greatest returns in the long run. Are you brave enough to go with your gut instinct and your own research?