If
I could boil down everything I believe about the future of the real
estate market into one simple message . . . what would that message
be?
I'll
start with this: Central Banks around the world are pricing money
(interest rates) at about ZERO PERCENT (yes, I'm continuing my theme
of talking about interest rates because I truly believe what's
happening is so powerful).
In
a zero-percent-interest world, you can't live off interest. You have
to do something with your money.
With
interest rates at record lows, retirees and investors realize they
have to do SOMETHING ELSE with their money other than earn no
interest on it.
So…
what are people doing with their money?
They
are putting it into the stock market and real estate.
Global
interest rates are near record lows. And that causes stock prices and
house prices to keep hitting new highs.
The
simple chart below tells you everything you need to know…
Please,
examine the chart and understand what it's telling you. It is just
about everything you need to know about the future of real estate and
investing right now.
Let
me explain it for you:
Global
interest rates are near record lows. This has caused house prices and
stock prices to soar. (I define global interest rates as the average
interest rate on 10-year government bonds in four major countries:
the U.S., Germany, Japan, and the U.K.) Specifically:
• U.S.
house prices are at their highest levels since the great housing
bust. (This is the S&P/Case-Shiller National Home Price Index).
• U.S.
stock prices continue to push up against all-time highs. They are
only about 2.5% below their all-time highs right now (as measured by
the S&P 500 Index).
This
story has been in place for a few years now… Can it possibly
continue?
In
short, yes…
We've
had a number of good years in the stock market and the housing market
recently. Because of this, most people think the good times have to
end soon.
You
have to keep the big picture in mind, though…
Retirees
and investors everywhere are coming to the realization that you can't
live on zero-percent interest. You have to do something with your
money.
The
light bulb is going off in people's heads these days – out of
necessity. People are putting money to work in the stock market and
the real estate market, whether it's the right thing for them or not.
As
long as global interest rates remain low, I expect that this will
continue.
I
could be wrong, of course. You'd be surprised at how high I think
things could go… I expect house prices and stock prices will rise
to unimaginable heights before it's all over.
I
think that's the natural outcome of our zero-percent world. Take
advantage of it by jumping in now and riding the wave of equity
appreciation.
Give
me a call if I can help you in any way.
On
Your Team,
Ken
951-760-3833
KenAHall@gmail.com
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