Tuesday, September 4, 2007

The SECRET Dance Between The Stock Market And Real Estate

The Secret...I've spent a considerable amount of time studying current and past Real Estate trends, economic statistics, and all facets of the Stock Market. As a result of years of study, I've found something that I think my readers will find very interesting. There is an absolute inverse relationship between the Stock Market and the Real Estate Market.

The rich get richer for a reason. They understand money better than the masses and make financial moves that typically yield the highest returns possible from their investments. The #1 way to accomplish this in the Stock market and the Real Estate Market is to buy low and sell high. I'm sure this concept isn't new to most of you but did you know there is a predictable cyclical shift of cash out of the stock market which goes directly into the real estate market? Did you also know there is a predictable cyclical shift of cash flow out of the real estate market back into the stock market?

The stock market like the real estate market goes up and down. Some may find it a coincidence that the stock market is usually at its highest high at the same time the real estate market starts to crash and that the real estate market is at it's height when the stock market is experiencing a substantial correction. I'm here to tell you that it is no coincidence. When the stock market surges to higher highs, the smart money starts to liquidate their positions thus locking in their profits before the market corrects and takes it back. When you're sitting on a lot of cash, your money isn't growing. The wealthy will then look for alternative investments that will produce the highest potential returns. A down real estate market presents a great opportunity to buy low and eventually sell high in the next real estate up cycle. So that's where their capital goes. This will in turn result, over time, in a stock market correction. By the time the stock market hits it's bottom, the real estate market begins to hit it's highest high in the cycle. Properties are then sold at the high for a substantial return and placed back into the stock market because the stocks are trading at a huge discount. This is the Secret dance between the Stock Market and Real Estate.