The Dow is bouncing up and down like a yo-yo.  One day it falls so far and fast people are screaming that the end of the world is coming.  The next day it breaks records for all-time points rise and percentage rise.  What the heck should you do?

First Things First

The first thing is: Don’t Panic.  This whole stock market and economy thing will eventually smooth out and probably sooner rather than later.  Don’t put your money in a mattress or anything like that.  Stay calm.

The second thing: Look at how your investment portfolio is structured and reexamine your long term goals.  If you’re diversified across a broad range of investments, including real estate, you’ll be OK.  If all you’re money is in the company stock or pork belly futures, you may be in trouble.  The idea is to spread your investment money around a bit so that when one thing is down the other is up and you don’t lose your shirt no matter what the market is doing.

There is actually a very thoughtful and intelligent discussion of this on a blog called The Simple Dollar in a post called Ten Steps for Remaining Calm in a Financially Turbulent Time.  I highly recommend giving it a read.

Does Real Estate in the MD Suburbs of DC Play a Part?

The short answer is: Yes.  If you currently own a home and you don’t absolutely need to sell it, my advice is to stay put.  It pains me to say that since I make a living from people selling and buying homes.  The hard truth, though, is unless you can sell your home at a real bargain basement price it will take a long time to sell.

Your home is a long term investment which means you should never have bought it with an eye toward making a quick buck. Of course, it’s also shelter and access to schools and good neighbors.(I’ll set aside here, for the moment, real estate as an investment such as rental properties)

If you need to sell because of a job relocation or any other reason and you have equity in your home I cannot over emphasize the importance of pricing your home correctly to current market conditions.

If you’re thinking of buying a home, your should view it as a place to live in a neighborhood of people, proximity to shopping, schools, transportation corridors or public transportation – all the things that make up “setting down roots”. Yes, there are lots of bargains out there and you’ll get a “god deal”, for sure, just remember to keep your eye (and heart) on what’s really important to you.

The days when you could double your money in a year or two by owning a house are gone. Real Estate (i.e., houses) will continue to appreciate slowly over the years. And that’s how you have to think about it – in terms of years.

Real Estate As A Nest Egg

If you take the long view, a home can bring you a lot of happiness and contentment as well as heat in the winter, cool in the summer, shelter from the rain and wind and snow, as well as a place to invite the posse over for Sunday football on the flat screen.

It will eventually bring you a lot of financial security and possibly wealth. It should most definitely be part of your “investment strategy”.