01 Dec Real Estate Investing – Where to Invest – US Stock Market Forecast 2017
Where to Invest in 2017 – Real Estate or Stocks?
Looking ahead to 2017 and wondering where to invest? US stock markets have had a fantastic run the last 6 years, with the DJ hitting 20,000. But is this the end of it? The real estate market had a sharp rise these last few years, but has it topped out too? Could they both crash or soar like an eagle? We know the past, but how are we on forecasting the future?
Choosing between property or stocks might seem like choosing between wine or cheese, ice cream or pizza, or, tofu or sushi, but after you read this post, you might find that one is more financially nutritious than the other. And if both markets crash in 2017, well, if you buy a house or property, you still have something! To ensure you make a good investment decision, you can read up on the advantages of buying real estate, to whet your apetite for the interesting video interview with investing guru Grant Cardone at bottom.
Like most real estate investors or stock market investors, you’re wanting to beat the averages and pull off a big win in 2017. And who can blame you? If you’re open minded and smart, you might double or triple the ROI anyone else is earning. This post not investment advice but rather a wake up to the strength of real property in the best zip codes.
Let’s take a quick look at real estate investment opportunities which might produce exception returns in 2017 compared to the stock market of 2017, which has pretty well peaked.
US Stock Market Forecast 2017
“For 2017, J.P. Morgan anticipates geopolitical risk stemming from Europe and the Middle East as well as questions surrounding the new policies from Donald Trump’s presidency will permeate markets. Still, the firm also estimated in the report that the S&P 500 Index will surge 8% to 2,400 by the end of 2017. A stronger U.S. dollar and higher rates pose risks for stocks in 2017, as these factors can affect price-to-earnings ratios, emerging markets, the housing market, and U.S. equity groups such as multinational, domestic manufacturing, and bond proxy companies, according to JPMorgan. – from a report on the WSJ.com.
Where are the Best Opportunities and Cities to Invest in Real Estate in 2017?
If you read my post on the best US cities for real estate investing, you know that some cities offer a 30% return right off the bat. Choosing the right city is a big part of the profit equation especially if you’re modest investor. The other parts are which specific types of properties to pursue, whether there’s plenty of millennial buyers in the area, and which types of upgrades bring the best return.
Home flippers will want to choose single detached homes especially where there is an income apartment built in to the property. Is San Francisco or New York or Los Angeles or Waco a good bet for a solid flip? Ask Chip and Joanna as I’m sure they know that market well enough. For other markets, there are sources so don’t shy away from a little research.
Pick all the right property buying variables intelligently, and you raise the likelihood of making a lot of money on your investment. Take a good look at rental income properties in Los Angeles, San Jose, Bay area and San Francisco simply due to the persistent high apartment rentals prices. It doesn’t look like there is a solution for that overheated market. With no new construction, current rents can only go higher.
Is Stock Market Investment a Good Choice?
Take a look at how the Dow Jones has fared since January of 2015. If it wasn’t for the recent Trump bump up, the market barely progressed. And the stock markets were all aglow about record prices. Well, they also said Trump would ruin them. After a lot of turbulence, it looks like investors believe Trump will be good for all the big corporations and perhaps economic growth in the US.
The stock markets are at all time highs with nowhere to go. The percentage gain on current prices will not be good. Of course, you may find specific stocks to gamble in high growth industries, but it all seems like roulette to me. Contrast that with real property in some of the hottest upcoming cites and what you could do with that property and now you have incredible potential for profit. And could all those people on HGTV be wrong?
The Trump rally will continue into the early part of 2017, then drop off as the Fed hikes interest rates more than the market expects and sentiment shifts, Goldman Sachs predicts in its forecast for the coming year — Goldman Sachs
And here in the last 12 months on the Nasdaq, we’re seeing flat growth in prices. If Trump hadn’t won the election, we would be seeing a flat line right across into 2017. If the Trump euphoria wears off and he can’t create the economic results he says are possible, you might see this curve heading back down to the 4500 mark. Personally, I think Trump’s efforts will provide much improvement, but that improvement might be more visible in the real estate market. That’s why in 2017, investing in real estate is where everyone is headed. That transfer of cash to the property sector should create some stellar returns. Discovering the best cities to invest in is half the battle.
Has any small investor ever gotten rich off of dividends?
So the tale of the stock market curve is really all you need to know.
Another important benefit of investing in real property, especially for house flippers, is that you’re more personally and emotionally engaged in the process and outcome. Stock market investing is passive and you can do nothing to help the performance and ROI. With real property, you are able to find ways to help yourself succeed. Wether it’s flipping or living in an income rental property, you can effect the performance of that investment. Let’s hope you make the right decisions and hire the right people!
Hear what Grant Cardone says about real estate marketing for next year.
Further resources on stocks vs real estate:
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