I always remember my fathers voice, when I was a kid, drilling me to “never pay full price for anything, son”. Interestingly, my father never had a big formal education – family circumstances had him working from 7 years old and full time at age 14. He also encouraged me to get a better education – and I did. However, while I may have an honours degree, my father’s advice, when I was a kid, has helped me make more money than almost anything I learned at Uni. So dare I say it, thanks Dad!
Which is the most important – the entry or exit price
As a trader, the profit in every deal comes from the price you pay, not just the price you sell for. This seems counter intuitive but is the reality of the deal. Same thing in real estate. Good family friends are in the property renovation space – they run this as a substantial and successful operation and while they add substantial value through their skills, work and design, the money in the deal is largely dictated by picking up the property at the right price.
As a result of knowing this, when I look at what has gone on across the markets in the past month or so, I am rubbing my hands in anticipation of some great profit. The flip side of the coin is the fear and panic that others are stressed about.
Imagine – post GFC made those with confidence millions
Post GFC, the US market pretty much doubled and yet so many people sat it out – watching nervously from the touch line and waiting for the perfect conditions to get back in again. Currently the Australian market is down 9.8% from its 1st August high, while the US S&P500 is down 7.2%. Have a think about the value that these moves are creating. For example, when is the best time to go shopping – when the sales are on, right? The markets are on sale right now and are beginning to present some great opportunities.
So the sales are on, its time to start picking up those bargains
If you were previously happy holding Australian banks, great news, you still get to and, better yet in the case of the Commonwealth Bank of Australia (ASX: CBA) for example, you are getting the same thing for 12% less – bit like going to the duty free shop! Want to chat with our analysts and get an idea where they see the latest opportunities? Click here