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Timing the Market for Maximum Growth

Updated: Dec 1, 2023

One of the most common questions readers ask me is, ‘When is the right time to buy?’

The two most common assumptions are as follows:

  1. You buy at the bottom and sell at the peak (and vice versa).

  2. It’s ‘time in the market’ that matters, not ‘timing the market’.

Both assumptions are somewhat incorrect!

As a buyer, timing the market is essential if you want to maximise growth.

And with knowledge of the cycle and how it plays out in Australia, you can do just this.

Let’s briefly break this down so you’re aware of how it looks.

As subscribers will be aware, the real estate cycle in Australia now correlates with an 18-year cycle.

In his 1983 book, The Power in the Land, UK land economist Fred Harrison identified a consistent, 18-year movement in land values in more than 400 years of English history.

And the late economist Fred Foldvary identified an identical pattern in the US.

The basic breakdown of the cycle is 14 years of generally rising land values plus four years of falling property prices.

However, bear in mind the rise in prices can go on for longer (16 years, historically) and the fall shorter. It largely depends on local policy and the level of speculation in the lead-up.

What is consistent, however, is that there will be two recessionary points in the cycle. I’m talking about a time when unemployment will typically skyrocket, and many businesses will be forced to close.

The mid-cycle recession midway through is the first.

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