REI Wealth Monthly Issue 13 | Page 49

“WEATHERING THE STORM” - GLOBAL REI SURVIVAL MANUAL CHAOS REIGNS ZIV MAGEN In this issue, we'll attempt to expand this growth, the entire Asia-Pacific region, large parts of philosophy of preparedness a bit more and try to which are dependent on Chinese imports, slows take it up a notch and apply it to our entire strategy accordingly. When the US sub-prime crisis hit, the analysis - our "global investor's headspace", if you entire world felt it, in ways too complex to detail will. After all, volatility isn't limited to exchange herein. And the trend isn't limited to the world's rates only. On the contrary, exchange rate biggest economies, either - not by a long shot fluctuations are merely derivatives and reflections (think Greece and its bankruptcy effect on all of global moods, regional economies, and their European markets, for instance). corresponding relationships. All of which have been growing more and more volatile on a yearly basis, as the world's various financial and property SURFING THE TIDES OF CHAOS markets become more intertwined than ever So where does this leave us as property investors? before. How do we ensure we're on the winning side of the In the early eighties, "The Chaos Theory" became equation when the unexpected occurs? an overnight hit - a semi-scientific series of speculative books and articles, which tried to illustrate how minor changes in the environment in one corner of the globe can lead to cataclysmic results in another. Some of you might recall Well, the key, in this author's opinion, lies in three major thought disciplines, which we must adopt, and in action items which are necessarily born of adopting them - reading one of its most famous paradigms, which claimed that a butterfly fluttering its wings in Africa can cause, through a long series of exponentially growing chain reactions, a tropical storm in the USA. These days, we don't need books and articles to drive this point home. With “cyber space” ruling our lives in a very real and physical manner, distances become irrelevant as countries and market sectors world-wide become connected via endless nerves of constantly flowing financial data. It doesn't take a "Chaos Theorist" to understand that a financial uptick or downturn, in any corner of the world, can have an immediate, overnight effect on another, however physically remote. When China slows its If you're buying, you should be buying because you found a good deal. If you're selling, you should be selling because you're making a profit. There are NO other reasons, period