I’ve often heard it said that timing is everything when investing, but I’ll let you in on a little secret – that’s not really the case.
BY MICHAEL YARDNEY
Timing is one of the most misunderstood concepts with regard to investing. The truth is, successful investors know how to create wealth at any point in a cycle.
Of course timing your property purchase matters. You don’t want to buy a property at the peak of the property boom and then wait two or three years before it starts to increase in value.
But successful investors find that timing isn’t really that important.
Have you noticed how some investors seem to do well in good times and do even better in bad times? Market timing isn’t really important to them.
On the other hand others do poorly in good times and even worse in bad times. Market timing seems to have very little effect on them either. Interesting isn’t it?
What is it that differentiates that small group of successful investors from the crowd?
The fact that successful investors manage to make money while unsuccessful investors lose money at the same stage of the property cycle suggests that it’s not their external world that determines whether they make or lose money, it’s something inside them.
Many would argue that it’s knowledge, but I don’t think that’s quite right. Sure they have a level of knowledge and financial fluency that the average investor lacks; yet knowledge alone doesn’t make them successful investors.
What allows some people to become super successful investors is their mindset - the way they think about money and wealth.
While some people are concerned about the news of house prices falling or the ‘property bubble’ bursting, others see the current property market as the best of times. Rising interest rates, falling affordability and market uncertainty have created an opportunity for them to snatch assets at great prices. These people see abundance.
Yes - while some investors are getting in the game, taking advantage of some of the best buying conditions property investors have experienced for a number of years, others are waiting for the timing to be perfect.
Only yesterday I spoke with someone who had been waiting for over 10 years for the timing to be ‘just right’ to start investing in property.
The timing will never be ‘just right.’ There will always be challenges, situations, circumstances, obstacles, fears, doubts and things that you are going to have to overcome. The timing is never going to be perfect.
Ten years ago this person saw some obstacles and didn’t get into property investment. If he did, chances are that wherever he bought his property it would have more than doubled in value by now, even if he had made a mistake and paid a little bit too much or bought in the wrong street.
Wealth is attracted to people who are decisive and committed. If you’re waiting for the timing to be perfect - the timing will never be perfect to you.
Currently property investors are being offered a unique window of opportunity; we’re in a buyers’ market.
Funnily I have found that most buyers hold back and don’t buy in a buyers’ market - but sophisticated investors do.
The list is long of wealthy Australian property investors who sowed the seeds of their portfolio in previous market downturns, with ‘remarkably poor timing’. These successful investors were busy doing, while others were pondering.
I’m certain five years from now there’ll be a group of successful property investors who will tell stories of buying properties when everyone advised them not to, when everything seemed difficult, when banks put up interest rates, when the media was uncertain - right now.
Michael Yardney is the director of Metropole Property Investment Strategists, a best-selling author and one of Australia’s leading experts in wealth creation through property. Subscribe to his e-magazine at www.propertyupdate.com.au. For more information about Michael visit www.metropole.com.au.