INVEST WITH YOUR HEAD, NOT YOUR HEART
The global impact of COVID-19 has understandably created a sense of hysteria for many, however, it's important to remain focused in this time and avoid making your investment decision based on your emotions, instead make it purely based on the facts and figures.
Is this a good time to be investing?
Economies across the world are being impacted as we observe the shocks and volatility being experienced in the share market.
History has shown that even through global crises such as the GFC, 1991 recession, 1987 stock market crash and outbreaks of illness such as SARS, the Australian property market remained strong.
The Australian property market is very resilient and as the dollar weakens in response to global financial instability, we are seeing an increase in the demand for property, from both local and international investors.
I believe this is driven by the core fundamentals in our property markets, historically low-interest rates and the uncertainty of the share market.
Invest with your head, not heart
It's now more than ever that as an investor you shouldn't allow the biggest error made by investors to occur, which is, to make the investment decision with your heart, not your head.
Investors who make these decisions based on emotion will invariably fail to achieve the return they were aiming for or worse, any return at all.
This is about making money with little or no impact on your life. It's imperative to remove yourself from your taste, biases, and prejudices, or information gained from friends or relatives.
Too much information or “information” thrown at us from the wrong sources will delay and can even lead to poor investment choices.
What information should you rely on?
It's always important, especially in times like these, to be relying on information from experts in property investment who have:
Performed the appropriate due diligence
Who are experienced investors and researchers personally and for clients
Who understand your strategies, your needs, and your budgets
What to focus on as an investor?
You need to be emotionally detached from the investment decision and listen to the right people, with the right information.
This is a financial decision, so try not to be overwhelmed by all the “noise” from all the wrong sources. It's not easy, however critical to detach yourself from emotions, including those of fear or even greed. Instead, this should be a time of opportunity for property investors.
Have a clear strategy, know your numbers, know why you are wanting to invest, don’t rely on your emotions and lastly, put your faith in experienced investors who have been here before.
This will pass and we will get through this together.
Again, I hope you all stay safe and well during these unprecedented times.
Warren Jacobs - Senior Property Investment Consultant at Meridian Australia
P: (02) 9939 3249
Disclaimer: When considering purchasing a property, it's always prudent to seek the advice of an appropriately qualified professional to determine which strategy is most appropriate for your individual circumstance.