Financial Safety Advice

Business cycles are relatively short wave growth and decay that affect the economy. This means that the trend of long-term growth of developed economies is not a smooth linear line. This trend of growth is accelerating moments and moments of slowdown in growth.These movements are called cycles and all economies go through these cycles. The danger faced by the investor at this stage is to invest in stocks at a time when the cycle is at its maximum and have the need to sell your investment when the cycle is at its floor, with the loss that this entails. To avoid this situation, as investors will have to learn to try to detect when they start and when they complete the cycle. Easy task, but that is the main objective of the economy.

But problems do not end here. As companies in their quest for growth through innovation and increased productivity are able to grow, but the process left in the way companies less innovative, less competitive, with products and services more expensive and of lowerquality that the winning company. The company, the winner, out of the market to the company losing. This process has the name of the process of creative destruction, the new company creates a new process or system and destroys another company. As investors, we will not only be analyzed when there are positive economic cycles, but also in this series the winners of this process of creative destruction.

The same can be applied to real estate investment. First, the cycles have much influence on the real estate cycle. That is, when the economic cycle is positive, the real estate cycle is very positive and vice versa. Therefore, it is vitally important to predict the cycles when it comes to predicting the real estate cycles. Second, the process of creative destruction also occurs in real estate investment. The most innovative and creative investors move to more rustic investors. Let’s see an example to better understand this point. Five years ago began construction in Buenos Aires buildings with what was called amenities, this meant buildings Read the rest of this entry →

Donald Trump the real estate giant indicates that it comes down to one question: How much are you willing to lose? this is said because in an investment sometimes you win and sometimes you lose, however, with good choices you can make it what is gained than lost yet this question is not necessarily the only place to Donald Trump when making an investment

Other sources indicate that in evaluating an investment or purchase of real estate Donald always wondered:

What’s the worst that can happen?

How I can overcome the worst happen?

Depending on the answer to those two questions Donald decided whether to go or not, there was a time in which Donald Trump thought “invincible” and stopped their purchases carefully evaluate and question the above issues and simply gave way, however at part of his great adventure that has taken most was losing all his money and then return to and become richer than it was now with his daughter Ivanka.

The evaluation questions above are applicable to any type of investment and rely primarily on finding safe as possible, if the worst happen you can not recover and does not pursue other safer investment, a principle has been to seek security and when there are more options is good risk as going forward.