Real Estate Market on the Brink of Significant Downturn?

 | Jul 03, 2023 08:53AM ET

My focus usually lies with stock indexes, sectors, and commodities, but today, we venture into the real estate market. Real estate is a market that many people don’t fully comprehend. Many are excited by the robust housing market, believing it’s never been a better time to buy. But the reality is, I believe we’re in a phase that isn’t ideal for such investments.

Taking a leaf from Stan Weinstein’s book, he proposed that the market has four stages: Stage 1, where active investment capital isn’t advisable due to the choppy, flatlining market; Stage 2, the bull market phase; Stage 3, a volatile phase where struggle reigns; and Stage 4, a phase marked by a massive decline. Stages 2 and 4 are usually an easy time for investors to make money. But in Stages 1 and 3, it becomes harder to grow your capital and much easier to lose a hefty portion. This is the crucial time to preserve and protect your wealth for reinvestment when conditions improve.