Here is my investment plan of 2021, where I'm investing, and where I think the stock market and real estate market will go this year - ENJOY! Add me on Instagram: GPStephan
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REAL ESTATE INVESTING:
What’s made real estate so DIFFERENT from nearly any other investment is it’s resiliency to everything that’s happened this last year…to the point where, it never really went down in price…in fact, real estate just kept going UP in price…and that was because of a few reasons:
One, when the FED lowered interest rates to 0%…it subsequently ALSO lowered mortgage rates…and that meant that, all of a sudden, the monthly cost of owning real estate became a LOT more affordable. Two, there’s a massive shortage of inventory. And third, they simply just can’t build enough homes to satisfy demand.
I would EXPECT to see more inventory coming on the market in 2021, but - as long as interest rates remain low - real estate prices should continue to hold fairly well. I believe the BIGGEST risk to real estate, RIGHT NOW - is interest rates. When the FED does EVENTUALLY raise rates, it’s going to squeeze affordability on buyers - and prices might subsequently begin coming down.
For those of those of you who DO want to invest this year, here’s my advice:
-Wait for the right deal.
-ONLY buy if you’re planning to hold the property for at least 5-8 years.
-The VALUE of your home should come SECOND to CASHFLOW.
STOCK MARKET INVESTING FOR BEGINNERS:
I’m going to quote something super cheesy that people hate hearing, but it’s the truth: “The stock market can remain irrational longer than you can remain solvent.” In other words, that means: the stock market can, and always will, outlast whatever you think it will do.
So, given that…as long as you have an investment timeframe of longer than 10 years…the best thing you can do is just ignore the noise and keep investing. My plan this year is to invest about 85% of my money in an SP500 index fund and that’s it.
The other 15% of my stock-market money will likely be invested in individual stocks that I believe in long term. Lately, I’ve invested smaller amounts in solar and other green energy companies, because not only do they help a cause that I believe in - but, I think they’ll do really well as more people embrace renewable energies.
So, overall…practically, here’s my investing plan for 2021 and exactly what I’m doing with my money, with some takeaways that will also apply to you:
First, I’m keeping a large cash reserve JUST IN CASE anything happens.
To me, this is my peace-of-mind to sleep well at night knowing that, IF anything were to happen - I’d have enough to fall back on to be okay.
Second, I’m re-investing about 85% of my left over money BACK into the stock market.
I’m doing this just by consistently dollar-cost-averaging into the markets, and that’s it.
Third, the other 15% is investing in the “other category”
This includes individual stocks, startup ventures, starting other businesses, or - a very, very tiny 1% portion in bitcoin / ethereum.
Fourth, if I use the cash position - it would be for an unbelievable opportunity.
This might mean buying real estate, it might mean an angel investment, it could be buying more stocks - I’m leaving this one up to opportunity,
And most importantly - DON’T SELL, even if we see things go down. The best thing you can do is stay the course, keep to the plan, stay consistent, and keep buying. Study after study have shown that those who hold their investments and keep buying, long term, end up making the most money...as long as you smash the like button.
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness@gmail.com
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