A good friend of mine called yesterday to say hello. After the usual pleasantries, we got into a fun discussion about the economy and did our usual rants about the country’s terrible politicians. We came at this discussion from different angles. He does a lot of day-trading of stocks and has most of his money in the stock market. I am a mortgage note buyer, so am more comfortable with real estate and real estate notes. I actually took nearly all of my money out of the stock market four years ago, and am glad that I did.
My friend feels strongly that the stock market has hit bottom and is pouring more of his money into equities. I feel that, although real estate has dropped precipitously, it is going to decline further. After all, there are 19 million vacant houses and the unemployment rate is still sky high!
In talking further, it became clear that my friend is only buying stocks of Asian companies and select ones in South America. Other than a few multi-nationals, he is staying away from U.S. companies and stocks. Since I can’t know all of the land laws in other nations, I only invest in really good (e.g. low risk, high return) real estate notes within U.S. borders.
Even in these low inflation times, we would fall behind financially if we went with low risk bank savings accounts and CD’s. So, we have chosen to take some measured risks, albeit it in different directions. My buddy is going with stocks, while I am sticking with real estate note (also called mortgage notes).
Nobody knows what our national, state, and local politicians will do next, but betting against them doing anything helpful is a smart wager. Never before have I been more concerned about our country. In the meantime, all that any of us can do is get our own financial house in order, and hope that the government doesn’t tear it down further.
Alan Noblitt is the owner of Seascape Capital Inc., which buys real estate notes. He may be reached at (858) 672-4678 or toll-free at 1-800-634-4697. If you would like to learn more about real estate notes and read informational articles, visit www.seascapecapital.com.
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DECISIONS AS THE COUNTRY IS DRIVEN INTO A DITCH