How Bad was the Recent Stock Market Slip for Real Estate?
Everyone should have seen this major downturn in the stock market coming. We’ve been warned it has been coming for years. Investors should have been prepared and diversified, and very little reliant on the portion of their investment portfolios in publicly traded stocks. Let’s hope that is true, as when a real correction starts, it generally slides far needed than necessary, and over corrects.
Fortunately, for those who haven’t heeded the calls to diversify not all stocks have been beaten as badly as others. According to Reuters the Canadian sector returns of the S&P/TSX composite index, saw healthcare stocks fall almost 12% in the first few days of February 2018. IT and telecommunications saw the least damage, though were still in negative territory. Right after those were real estate stocks, with around a 3% loss during the same 3 day period.
On the bright side, if you own real estate stocks, at least many companies have real underlying assets, and may throw off dividends, even if far more modest today.
How you invest in real estate makes a big difference. For direct owners, and those holding real estate in private partnerships, this stock market correction can be great news! You already have a solid asset, likely an income stream, and the ability to control your asset value through improvements and repositioning.
When stocks slump investors and their money race to safer investments. Bonds are horrible. Gold prices are still high and aren’t providing income. This leaves real estate as the top choice where many will run. That demand will likely boost the value and opportunities for those already holding real estate.
Stocks may be on a deep slide. Real estate stocks maybe among the least affected. Yet, it is only smart for those who have been dragging their feet to ensure their portfolios and future finances are secure.
This activity provides a short window to acquire more real estate on good terms, and perhaps even from companies reeling from recent turns in stocks. Following this will be a great period of exit opportunities. Some will hold onto their real estate long term and do very well. Others will seize on these opportunities to time the market to avoid loss and create even larger leaps in income and wealth.