Now Is The Time To Deploy These Essential Investor Habits
By Patrick Francey
In recent months weve seen some significant changes in Canadian markets. From the euphoric heights of Things have never been better! to the (seemingly) catastrophic depths of Things cant possibly get any worse. Are things going to improve or spiral further downward?
Further changes (political, economic, and environmental, in Canada and around the world) add even more questions marks. Its difficult to know whats just around the corner and how to act decisively when you have that level of uncertainty. Im hearing from investors especially those who invest in Western Canada that they are re-evaluating their real estate portfolios in light of recent oil market shifts and potential future market shifts.
While its tempting to react to both real and potential changes, our reactions must not be knee-jerk but instead be mindful and well-considered. So when I hear investors question the direction of the real estate market, from housing prices, to mortgage rates and vacancies (often with an edge of panic in their voice), I share the following six pieces of advice:
1. Maintain consistency. In uncertain times, the best course is often one of consistency and patience. No great investor achieved their level of success by reacting wildly and attempting to time the market as this often results in selling in the downturns and buying in the upturns. Rather, they relied on their proven consistent actions that they performed every day regardless of what the market was doing. To borrow an analogy from someone who has lost a lot of weight, its not the fad diets that make the long-term difference, its the small and consistent choices made every single day. Likewise, in your investing business, smart choices made daily no matter what the economy is doing will help to reap the reward perhaps not tomorrow or next week but in the long-term.
2. Get educated. Economic shifts are an external way of highlighting a need for further education. While a marketplace downturn might feel like a punch in the gut, you can be sure that many others have survived and thrived through previous downturns. Dont get caught up in the hyperbole that comes with economic shift, dig into finding out whats real, attend REIN events, or participate on myREINspace and see how they kept going. Youll probably discover a number of experienced investors with a number of strategies that you can apply.
3. Practice resilience. Theres a saying by George A. Custer, It’s not how many times you get knocked down that count, it’s how many times you get back up. Thats the principle of resilience. These marketplace shifts may feel like theyre knocking you down but the most successful investors are the ones who rise again. Of course your actions might look different the next time you go to get up but just get up! Im reminded of another quote (attributed to a number of people) that is applicable here as well: The safest place for a boat is in the harbour, but thats not what a boat is for. As investors, we need to be strategic in our investing and strengthen our resolve to face the uncertainty of the market.
4. Respond with consideration. Opening the headlines or turning on the nightly news, we are bombarded with negative headlines about how bad things are. So we need to read beyond the blazing bad news headlines and dig deeper so were making decisions based on whats real and not making decisions that we may regret later. As you look at your investing portfolio and consider what actions you might take, define your plan based on facts not headlines. Ask for help from your coach or mentor. They wont tell you what to do but they can give you other ways of looking at a situation that may change what you do in your portfolio.
5. Get creative. Stop thinking of market changes and downturns as show-stopping or a money-losing disaster. Throughout history, major social and economic changes have been the catalyst for amazing growth, profitability, and success for those who took on the challenge to become creative at how they acted in the crisis. Dont think of todays negative headlines as bad news but as the soil covering a deeply hidden, more profitable way of doing things. All you need is the creativity to find it!
6. Dont stop investing. Whatever you do, dont stop investing. Many new investors enter the market during good times, only to be scared off when things take a turn for the worse. Savvy, experienced investors will tell you that downturns are the time to expand, not contract. Houses can be acquired affordably and positioned for an up-turn in the future.
Theres no shortage of headlines announcing Impending Doom! But just because the news media is focused on the negative aspects, I can tell you that there are many investors who are actively (and sensibly!) evaluating this market shift as an opportunity.
Economies fluctuate. Markets go up and down (and back up again). In investing, there are lean times and fat times. Whatever you believe the market is going to do in the future, plan for it and adjust your investing strategy in a way that supports your beliefs.
Right now, you might be feeling the shocks of a market that shifted against your expectations. But if you practice these six habits of the most successful investors, youll discover that there might be a silver lining to the cloud.
Patrick Francey is the CEO of REIN. As a serial entrepreneur he owns many businesses and has been a real estate investor for nearly 20 years. The majority of his holdings are located in Edmonton and Grande Prairie.