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Ben Kingsley Blog post by Ben Kingsley

Predictability in an Unpredictable Time

How does that saying go…”Change is the only certainty in our world”.  It’s true, all things change, some quicker than others, but over time change is inevitable.

When you put your investor’s hat on the same thing rings true. Markets are constantly changing.  Investments that were nice earners over the past few years might now be stagnant investments, a great example of this is retail stock on the stock market.  They have a great time of it when times were good and they didn’t have virtual shops via the internet to steal their customers.

There are days one would be hard pressed to see a way forward in the short term for these business as they struggle with the always present pressure of their shareholders to deliver strong returns that keep pushing their share market values higher. When one looks at an investment  all sorts of factors and variables  need to be considered and this brings me to the topics of this month’s article.

 

Trying to find predictability in one investment selection.

As someone constantly studying and challenging investment theories in the pursuit of better wealth creation strategies, my journey has taken me into share markets, foreign exchange markets, bond markets and of course property.

 

So what is predictable about property?

The standout answer is that we humans need to put a roof over our heads.  (We’ve moved on from Caves).  So along with air, water and food, shelter is an essential staple ingredient of our lives.

So in ‘economic speak’ – it’s a high demand item.  If only it was as simple as that.  You see we humans are more complex creators , we moved on from our cave needs and now we want more.  Because if it was as simple as that we just build the amount of houses we need to meet supply and the value of houses would remain relatively stable.

Over time, we humans have developed wants and desires over just basic and essential needs for shelter.

Those who understand this best, know the types of factors that make a property and its area highly sought  after and yes you guessed it more predictable to demand drivers that influence value growth in the really good times, but also place a stable base for values in overall unpredictable times.

It’s this predictability that makes the lack volatility and low volatility and to an investor who uses gearing (borrowing money to leverage their position) this predictability is like their insurance policy.

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