Three Important Behavioural Traits to Remember when Investing in Property. Mar, 2016

Predicting investments is much like fortune telling - its mostly a lot of guesswork and vague statements with very little repercussions on the guesser when mistakes are made. Which is why we prefer to make only astute observations with as little guesswork as possible, and couple these observations with careful recommendations on investor behaviour, rather than attempt to debate with and dabble in the volatility of investment recommendations.

As property enthusiasts and investors looking to diversify their portfolios, they look for signs of recovery locally, or look outwards beyond the horizon for high-growth in overseas property markets. Whether you are entering into familiar or not-so-familiar territory when you consider real estate, these are the most important behavioural traits we believe you should have ingrained.

Trait #1 - Curious, with a healthy dose of skepticism.

With the volatility, instability and turbulence in the markets, developers and owners are using more clever ways to push out their projects - with more aggressive marketing, deeper discounts and superior selling positions. Across new, resale, or rental markets, this presents perfect opportunities for speculation and entering into alternative investment strategies for second, or even third income streams that ensure security.

Yet always remember to be healthily skeptical: the old adage of ‘it it sounds too good to be true, it probably is’ applies more so than ever now. Beware of unrealistic promises of returns, investments or properties that you cannot afford and cannot afford to lose, and schemes that you don’t completely understand.

Trait #2 - Patient enough to be future ready.

‘Never test the depth of water with both feet’. This brilliant nugget of wisdom comes from none other than Berkshire Hathaway’s Warren Buffett himself. In an already tumultuous year, learn to balance your own investment portfolio and prepare for any redundancies and exit plans necessary. Don’t be tempted to rush into things to make a quick profit, but also don’t waste too much time with unprofitable or overly draining property investments!

A defensive investment strategy that is conservative enough to ensure you still have holding power might just be the most prudent course of action, treading these volatile waters. With the amount of instability and turbulence alongside negative market sentiments, one must be able to make good decisions and pick correctly from a large batch of mixed-quality projects, profitable opportunities and undervalued assets.

Trait #3 - Rational and Realistic.

Markets are driven by sentiment. Surges and falls are caused by fear and greed. While it’s only natural to celebrate a huge win, or be mildly bummed out by a loss, the worse thing one can do is abandon a well-thought-out investment strategy simply because of a few initial failures, or become over confident in a unplanned for “sidetrack” just because you’re on the winning side.

Over time, develop a well defined investment strategy - to diversify, or focus, to invest for the long term or shorter terms, or consider investing for capital gains versus investing for cash flow. Then be focused on your investment vehicles, without being overly affected by any market fluctuations or distractions from the multitude of commentators around!



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