Market Landmarks

Market Landmarks

Savvy investors in all fields look for market landmarks. Market landmarks are indicators of a possible shift in risk or yield. They may be selling signals or buying signals. A huge landmark in recent events was the end of hostilities in the former Yugoslavia. The real estate markets in these countries have boomed. As countries join the European Union, they have a strong upward swing in real estate prices. Joining the Euro has the same results.

The Middle East could be an excellent place to look for market landmarks. One only has to look at Qatar and Dubai to realize what could happen with liberal stabile regimes in this part of the world. Murmurs of peace or liberalizations of regimes can be market landmarks. One thing to remember though: Change can also bring instability which will, at least temporarily, affect markets negatively.

A good example of this is when Suharto left power in Indonesia. The resulting instability is still affecting conditions there. A slow return to normality will improve conditions. Certain areas like Aceh may be slower to return to stability. There is a great deal of profit to be made in taking advantage of this type of system change. One of the oldest investment maxims is, “The time to buy is when the blood is in the streets”. While that may be a little extreme, turmoil does indicate a possibility of opportunity.

Other market landmarks may be less ominous. The uncoupling of the dollar and the peso and the freezing of assets in Argentina caused some great buying opportunities. The peso has, after the initial crash, maintained its position against the dollar. This could be as much a result of negative events in the USA economy as positive events in Argentina’s economy. Commodity prices are strong and Argentina is a commodities based economy.

How does an individual investor identify and take advantage of market landmarks? That would be a good subject for a later blog.

David Segrest is a REALTOR in Charlotte, NC

David S. Segrest, CIPS, CCIM, TRC, CEA
david@segrestrealty.com
http://www.segrestrealty.com
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