Stitch it together in time
The newspapers of yore and the newspapers of the present offer readers a very different experience. The typical reader would recall reading the headlines , moving onto the local news or other interesting pages in sports , business or entertainment. Today’s newspaper starts with the full page realty ads, followed by more of the same with relief from the gold jewelers ads. The headlines follow this ad splash and then one quickly returns to the daily advertorial pages on gold and realty. The poor reader has to actually strive to read between the lines and make the distinction between news and advertisements. The story of every bubble starts on the front pages of newspapers and ends when the first page returns to the business of reporting news headlines. The newspaper is a great barometer of economic trends and the story is not in the news it carries. The story lies in the news it fails to carry. The untold story fails to report real housing demand, unsold inventory, poor rental demand, high monthly maintenance costs, delayed project delivery, high resale of unoccupied apartments, high cost borrowings on real estate projects ,heightened solvency risk among developers and falling demand for homes. Instead, you see ads staring at you from every other page selling you Suburban Utopia. The first page will take some time to return to reporting the headline news. Till then, it is bubble time for the print media.
Skepticism negates objectivity. Skeptics rarely spot the best investment ideas.
Debt investing works best when the investor plays the cycle right. When interest rates start rising, investors gradually move money into debt instruments that give stable returns. When interest rates peak, investors lock money into long term debt and stabilize their long term returns. It is when interest rates start falling that investors struggle to find solutions. Falling rates is an advanced sign of a rising economy. Investors who are principally debt-oriented need to take cues from these signs and re-balance their investing. After all, the best way to raise returns in a rising economy is to bet on it. The way to bet on a rising economy is to buy equity in small increments. While your investment portfolio can principally be debt driven, taking on a limited equity exposure will clearly compensate the drop in interest rates. Logically, one must bet on the beneficiaries of falling interest rates. Equity holders gain when interest rates fall. Becoming equity holders now will greatly help debt investors generate stable returns. The important thing one must remember is to limit equity exposure to a ceiling and gradually raise your exposure till it reaches that limit. The time to begin re-balancing is now.
Buy steadily now. Avoid chasing the missed bus later.