How to invest in a down market
After speaking with a buyer last night who wants to get into real estate investing but believes the market is going to go down, he asked me an interesting question. How do you invest in a market that's going down?
My response is going to tick a lot of people off so feel free to complain away. IF YOU BELIEVE THE REAL ESTATE MARKET IS GOING DOWN (and I'm pretending to know) then the only thing you need to do right now is hoard cash. Your stocks are down already sometimes as much as 50%. Your $401k will be down. It will be the absolute wrong time to be pulling out of the stock market, probably right before it rebounds. Cryptocurrency will soon be worth less than the cost to mine it meaning it will also go to 0. Anyone who previously believed that cryptocurrency was a hedge against volatility must know at some point they were absolutely out of their minds. Anyone holding crypto will go bankrupt. Real estate in a down market will be harder to sell.
Quite possibly the only thing that could and would probably go up will be gold, but, IMO that's not guaranteed either, and therefore the only way to know you'll have cash to buy something in a down market is to hoard cash. When the market goes down, you're going to need it and since nobody has the foresight to hoard it when things are up, nobody has it available when the market is cheap.