As we all know, times change and so does the world around us. Every 4-6 years new cycles start in the national and global economy, these cycles are neither good or bad, simply different and create opportunity for those that understand markets and can anticipate the changes to come.
In 1999, the emerging market was real estate, few people saw it coming early and chose to jump on the bandwagon. Some of the traces that indicated the boom that was to come were as follow.
- Government involvement: The White House encouraged banks to lend money to minorities.
- Banks created more options for borrowers and became creative with their loans, from stated income to 110% loan to value loans.
- Customer spending was increasing: more people realized that their equity was increasing and tapped into their homes to get rid of debt, instead of paying it off
These were simply a few of the signs of what was to come. Those that jumped on opportunity got wealthy from it, those that chose to wait and wait and wait until it was a sure bet, became known as the reason why the market crashed.
It is important to look for signs in a changing economy, and to act on those opportunities early.
As the market crashed, the emerging market of foreclosures and services to help prevent foreclosures emerged. There was also opportunity there, however of much shorter time frame.
In the next few months, keep an eye out on signs/hints to make sure you don’t miss out on emerging opportunities. Look for new bills signed, new laws put in place, new restrictions, new tax cuts, new bailouts, new trade agreements, it could be anything and everything you hear.
If you find it, then take a chance. A small risk for a great reward.
