Is anyone preparing for the next downturn?

With everything going frothy there is tunza money to be made and most of us on here are well and truly getting amoungst it.

Great!

But I wonder how many of you are selling a few bits and pieces here and there in order to have powder in the keg to go on a mega shopping spree once the tide goes back out?

This isn't a doom and gloom thread!! There's just as much (if not more) money to be made in downturns...just wondering if the next downturn is factored into anyone's strategy and what you're doing right now to make sure you're ready?

 

Just making sure I keep low levels of debt and have quick access to a good amount of cash ready to pounce. But I suspect it wont be anytime too soon. I prefer to buy when prices are starting to move again slowly though. 7-8 o'clock approx if possible.

 

Yep, last month I reduced my debt levels by 75% .

Now waiting for the “end of the world” to arrive

 

If you sell anything now especially only after 3 months of this crazy increases your potentially losing out on a massive amount of growth that is yet to occur.

This frenzy is going to continue to at least the entire 2021 and maybe well into 2022 as well. Selling right now is not a good idea imho. Ride out the wave as much as you can. Its the biggest capital growth opportunity to probably ever present itself.

 

Medium term, maybe esp if you change asset types. Eg selling units to buy a house, or selling other properties to buy acreage.

 

I have been reading that the Federal --Reserve are telling anyone that the USA economy ,and ''Inflation'' will grow at a faster pace during this year then it had forecast on it's meeting on March 11th..

Then once you look at ''European Central Bank'' as they intend to upscale and are committed too it's purchase of bonds over the next few months with the euro's zones economic recovery and rising borrowing ..

Myself as i don't intend to sell anything real estate wise,but small caps that one buy's for 20 cents that go above one dollar over a 12 months period --yes--..Take the money and run..

 

I can’t see any doom day even with so much cheap credit the central bank have pump into the system. It will take a couple of years to work into the system. Unless for a freak black swan event.
We aren’t even out of the pandemic yet. LOL

 

Prop markets don't yoyo like stock markets or crypto, given the illiquidity which works to its advantage. If you mute the "sold for a billion dollar over reserve" headlines, we are tracking 6.8% growth to-date nationally. This is not phenomenal or even the mid cycle - This is 7o'clock in any boom cycle - being 3-6 months old that it started.

Commonsense & prudence says to always have buffers but never before during any boom cycle, we have such clear widespread consensus on IR and forecasts.

When we hit peak (assuming some stage in 2022 or 2023), the assumption that everyone makes is that the values will tank immediately - which surprises me. They can tank as a remote possibility but after a boom cycle, they grow slow and then stay stagnant until wages have risen and then go again. Syd/ Mel declined by 10% (on-average) in 2017 lead by APRA & Banking royal commission in tandem, and APRA underestimated the impact on the cycle and is not likely to go that heavy again.

I dont see massive buying opportunities, if the market goes up by 30% and then declines by 10% - it would still be up significantly Vs now so it's better staying invested! Even the bears don't believe that once they are up again say 30%, they will go down by 40% (the net difference between the end of this boom and low of 2018).

Selling now and shaving (potentially) 25% of the value in CGT means that the prop markets would have to decline by well over 40% to be able to use the after tax dollars from current prop sales to buy at that stage! The possibility of which (over 40% declines) happening is as good as Australians being able to travel to USA from next month!

 

You are talking with your head screw on right on your shoulder. Or you have been around for way too long.

Property is my steady cash flow. Stock market and crypto currency is my liquid cash.

 

Yes but not here, the game is rigged here ,

Was in Europe buying distressed commercial property

Back here now and Selling things now, going to to go over again in q3 to follow Up on a Few things . Look there in the commercial space for downturn impacted opportunities

 

We’ve already taken profits to pay down debt so we can buy some more .

not interested is selling any more at the moment . Will be a matter of watching market .

cliff

 

Maybe but I am ...

 

Similar scenario here but diversifying into shares and REITs

 

The love keeps giving, I give up trying to predict the next downturn....

 

If you sell down now you are likely to lose a lot of the upside.

RBA has said interest rates will stay low until 2024, so we have only just started the boom.

Corelogic shows house prices in Sydney have risen 4.32% this month alone and its still accelerating. If you annualise this, you get 52% gains per annum if you are not leveraged. Leveraged up, gains are in the 1000%.

Can you imagine what Sydney house prices are going to be in 2024. That's a huge loss if you sell out now. If anything, you should be accumulating.

+1. Experts are saying this is the best period for real estate since 1988. For most people, it will be the biggest boom in their lifetime. Not one to waste!!

 

If you've sold in somewhere that's gone up 60-70 % ( hobart ) and buy somewhere that's only just starting to move , you've maintaining the momentum of your money.

yep , Hobarts gone up , but I think where's I've bought will go up more in the next five years .

Cliff

 

One of the golden rules of investing IMHO is don't believe the experts .

My main concern at the moment is that all of the experts are predicting a boom and that is what always occurs near a peak .....

Cliff

 

This is my dilemma. I've got a few that I want to move on. I don't want to miss out on growth, so deciding in what order they go is hard. Wait too long on one & you've missed it. Go too early on another & you've missed out.

 

Why not do what I did/am doing. Calculate prices in the future say 12 months based on current rate of growth, and only accept that price. If you get a bite, great. If not, you can always negotiate or not sell.

 

Yep

it is a dilemma , but in the past I've rarely seen things come to a screetching halt out of no where . If you stay active in the market , there are usually indicators , though there are usually a couple of slow downs on the way up so it's not always completely clear ... . If the market peaks and you want a quick sell , there's usually a few people who haven't realised what's happening and if you offer a bargain at 10 % off ...

BUT , the underlying factor is , DOES SELLING NOW , GET YOU WHAT YOU WANT .

When we sold in Hobart a couple of months ago , I was as certain as i could be that the market would keep on going . BUT selling then would enable us to take the next step we wanted to do BUT if for some reason , the market DID come to a screetching halt and we couldn't sell , We wouldn't be able to take that step , so we sold .

If the equation was over what type of boat we could buy if we sold , we would have rolled the dice and held ...

Cliff