Mortgages, Stock Market, Investment And The Funky Chicken Little

Investment in the stock market can be very risky and is definitely not for the faint of heart, especially when there are hundreds of billions of dollars and peoples home mortgages at stake, with congress holding the purse strings to our future and fraud seemingly a big part of the mess.

Talk about schizophrenia, we have a large segment of the population who were lulled into a trance of easy investment over the years who have rarely, if ever, had to worry about the sky falling’ as Chicken Little feared. Is it any wonder that millions of investors are doing the Funky Chicken Little because the stock market was doing the Limbo.

Though the nervous barn-yard bird seemed to exaggerate the severity of the problem investors cannot be placed in the same realm.

Fact is that if you have money in the stock market, you just lost money in the stock market. There was no vaccination or serum to protect you. No Mulligan’s here. The markets downfall was fast and furious and the friction started a fire in which everyone got burned.

In retrospect, the market does have corrections, and this looks a lot like one. Crazy, speculative buying has inflated home prices to the point where many of us knew that the bubble was just waiting for a sharp object to pierce its’ thin exterior, thus exposing the over-appraised real estate as a house of cards. And the walls came tumblin’ down.

But there is good news in all of this. The world is not going to end (not soon anyway – I have 11 payments left on my car). The stock market will bounce back, and it will surpass its’ previous high. Real estate has come down to the point where there are excellent opportunities for investment, and low rate mortgages are readily available for those who have minded their credit P’s & Q’s. South Carolina is full of high return properties which need owners.

And yes, I do have a crystal ball. It is full of newspaper clippings from all the market swings we’ve already experienced as a nation. There are actually still people alive today who have been through every tumble, leap and free-fall our stock market has encountered.

Real estate will recoup the losses it has undergone and re-establish peoples trust in it as a tangible investment. Stock market money is faith based’. Real estate is real. When things are good both accrue interest. When things are bad one is just paper, the other is just land and or structures. Which is better? That’s for each individual to judge.

I like the physical nature of property. It generally does not devalue as quickly or as deeply as stock. On the other hand, stock is much more fluid (read liquid) than land. Try and find a buyer and close a real estate deal in 24 hours. If you do it will be at a huge loss.

There are good and bad to almost anything. As always, keep your eyes and ears open for opportunity and be willing to jump when they present themselves.