Happy New Year
For those worried about the economy and their investments, it may not seem like a very happy New Year. However, it is times like these that we should stop and reflect upon our long-term blessings. Worried about home prices going down? Yes, median prices were down to around 180,000 last month. This drop was over 13.0% in one year and represented the largest one-year plunge since the depression. Would you like some perspective? Median home prices were approximately $80,000 in 1990. In other words, prices are up 125% over the past twenty years even factoring in the recent decline. And with lower home prices and record low rates, homes are now as affordable as they have been for the past decade.

The stock market? Down 40% in a year. Obviously stocks are much more volatile than real estate. A drop in a portfolio of 40% in one year has to be unnerving. Here we have another historical perspective. In 1990, the Dow Jones average hovered around 3,000 as opposed to the 8,500 during the final month of this year. This also represents an increase of over 100%. There are many who see tremendous buying opportunities in stocks right now, just as many are crowding auction houses to get a chance to bid on real estate bargains. The message? In every down market opportunities are created. Those who benefit are the ones who step in and take the opportunity of today. The markets will turn around. Those who wait to act are more likely to miss the opportunity. And that is the reason it is a happy New Year. Because we live in a country that gives us the ability to take advantage of opportunities and take the risks that go with these opportunities.