Here is my recession proof investment plan for 2020, exactly where my money is going, and how this should stay profitable long term - Enjoy! Add me on Instagram: GPStephan
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First, let’s discuss something that a lot people have been asking about:
Data shows that any short term drops in the stock market had very little effect on overall home prices. Instead, real estate values are largely driven by the age old saying: LOCATION, LOCATION, LOCATION. Real estate prices are heavily influenced by specific market conditions of demand, proximity to employment, and current supply of inventory…this will vary DRAMATICALLY from Location to Location, not necessarily by what’s going on with the overall economy.
Second, Real Estate values will be HEAVILY influenced by how high…or low…the mortgage interest rates are….and, right now, they’re INSANELY low. The FED just dropped rates a half a point, and they’re expected to lower rates even further, which happens to make Real Estate wayyy less expensive to own.
And third, GENERALLY speaking…people aren’t buying and selling homes multiple times a day like they might do with stocks. The MAJORITY of people buy real estate with the intention of holding it a very long time, meaning that the value of their home doesn’t make much a difference in the short term. Not only that, but valuing the specific price of the home is rather complex…so, for that reason, we don’t notice a huge swing in prices between one home to another.
Now, let’s talk stocks. I think that IF we end up seeing a big correction coming in the near future, and prices drop further…I’ll probably ramp up my contributions a little bit, but otherwise, everything stays the same. I know there’s been some talk about investing in Bonds, Gold, or trying to Short the stock market…but, honestly, that just seems a little unnecessary for me, and most people would be best off just dollar cost averaging into the markets, and letting their money sit.
So, as far as where I think stocks will go from here…I don’t know. No one knows. It’s pretty irrational, but all we can do - based on the last 100 years of stock market data…is just to continue buying, and eventually, things will rebound.
And that leaves me with my “Recession Proof Investing Plan” - one, continue to hold and buy real estate, which won’t typically fluctuate much in price, and even if it does - data shows that rents remain fairly consistent, regardless of what happens - and, really, that’s all I care about at the end of the day.
Second, I’ll continue buying into the stock market as usual…it’ll be a mix of US Equities, International Stocks, and Bonds….and that’s it. This is all meant to be money I won’t be needing for the next 20-30 years, so whatever their values are before then doesn’t make much of a difference, since I won’t be cashing out.
And, third…I always make sure to keep a big safety fund on the side. And, if you don’t currently have that…then that’s something you should immediately be working towards.
And I know that even if the markets DO go down…only invest money you don’t need for the long term, only buy properties that you can afford, where the rental income could sustain all of your payments, and only get fixed, low interest, long term mortgages.
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness@gmail.com
*Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available.
My Recession Proof Investing Plan For 2020
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