“WEATHERING THE STORM” - GLOBAL REI SURVIVAL MANUAL CHAOS REIGNS ZIV MAGEN
2) PEOPLE ARE A HERD OF PANICKY,
STAMPEDING BEASTS - AND IT'S OUR
TENDENCY AND NATURE TO JOIN THE
STAMPEDE
You've seen it a million times. You know it's true,
yet you can't stop yourself from feeling, for a split
second at least, like joining the run every single
time it starts. Admit it. How many times have you
told yourself something like "gee, prices are falling
1) NO ONE - YOURSELF INCLUDED - HAS
like crazy, I'd better pull out/liquidate while I still
ANY IDEA WHAT TOMORROW MAY BRING
can". Or, "wow, this area has sure picked up nicely,
I'd better buy here before it climbs out of my reach".
Not politicians or their central bank cronies
In fact, common sense dictates the exact opposite -
(conspiracy theories aside). Not hedge fund
when its low it's time to BUY - and when it's high
managers, the ol' wise guy at the local pub, your
it's time to SELL.
mother, your smooth talking next door realtor, his
favorite seminar guru, Nostradamus, not even god
Recognize this tendency in yourself and nip it in the
almighty him or herself (well, god/entropy/the
bud. Property investing is a long term endeavor
universe might know, but isn’t telling, so it's a moot
and you're in it for the long haul. If you're buying,
point). There are simply too many independent and
you should be buying because you found a good
at the same time inter-dependent factors involved
deal. If you're selling, you should be selling
in the equation. Any guess, educated or otherwise,
because you're making a profit. There are NO other
can be completely thrown off-track in the course of
reasons, period. DO NOT PANIC. Stay the course.
a few months, weeks, days or even hours. As for
Adjust if you must, or if there's something to be
what will happen over the course of a year or five -
gained, but do not let market winds dictate
don't make me laugh.
complete changes of strategy, and do not let fear of
loss panic you into actions that you may regret in
Speculation will kill you. Banking on future results
hindsight. These extreme fluctuations are caused
that may or may not happen will bury you. This
by people and their extreme emotions and
isn't to say that you shouldn't position yourself to
reactions. There's ALWAYS a correction coming
be able to benefit from something if it happens -
down the road. Market behavior is cyclic, and it
only that you shouldn't base your decisions on the
flows around the world over the course of several
assumption that it will.
years or decades. It's never "now or never".