Time Magazine – A Great Article

Published by Lance Mohr | Filed under Home Buying Tips

I ran across this article written by Dan Kadlec of Time Magazine.  It is very refreshing to see someone who is in the media that knows something about what investing.

Dan wrote”… FAMED MONEY MANAGER PETER LYNCH is perhaps best known for his timeless wisdom that you can eat the pros by focusing on stocks of companies where you either work or shop or have some other edge. But a more relevant Lynchism today is this gem: Ignore the headlines.

A top reason to not buy stocks, in Lynch’s view, is if you don’t already own a home-in which case, that should be your first investment, since an owner occupied home is nearly always profitable. Through a spokesman, Lynch reaffirmed these views to me housing debacle and all.

When prices are falling, few people have the discipline to buy stocks, a house, gold, art or any other asset. But those who do pull the trigger excel in the long run. As John D. Rockefeller famously said, “The way to make money is to buy when blood is running in the streets.”

Let’s say you are emotionally ready to be a homeowner. You have good credit, plan to stay put for five years and have been waiting for the perfect entry point. It’s time to get serious-before an inevitable rise in interest rates wipes out your advantage. “The thing that will make home prices stop falling is the very same thing that will push mortgage rates higher,” says Jim Svinth, chief economist at mortgage firm Lending Tree. So anything you gain by a further drop in prices might be offset by rising financing costs….”

(Read full article here: http://www.time.com/time/magazine/article/0,9171,1713483,00.html)

It’s a shame that too often “bad news sells”.  It’s very easy for all of us to fall into the trap of buying into what we hear without realizing that it isn’t always reality.

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