According to a recent study on investor timing when it comes to buying and selling assets, we suggest you open a can of Mr. Spock on your strategy. Remember Mr. Spock? The half-human, half-Vulcan first officer aboard the original Star Trek television series starring that guy in the Priceline ads before he became a caricature and national treasure? According to the New York Times, Philip Z. Maymin, of the Polytechnic Institute of New York University, studied call records at an investment boutique over the course of 17 years.
His finding was that, left to their own devices, most investors can pinpoint with almost uncanny accuracy the precisely worst time to buy or sell their assets. This study was concerned with the stock market, so what does that have to do with investment properties? The truth is that a human being is a human buying and, whether buying stocks or investment properties, the emotions that drive us into hasty action are the same.
The interesting conclusion reached by Maymin was that the greatest value provided by the boutique firm in the study was in talking investors out of their planned course of action. In other words, stopping them from rushing in with an emotionally charged decision.
What does this have to do with a portfolio loaded with investment properties? It’s simple. Take the emotion out of the equation, no matter how difficult that might be, and make all buy and sell decisions based on a careful analysis of the performance data, NOT on the disaster-of-the-minute news cycle churned out by cable television news stations desperate to one up the competition. You know what? Here’s a better idea. Turn the television news off completely. You really don’t need all that crap going into your brain. You’re in this for the long haul, right? Then sit down, shut up, forget the “catastrophic” event taking place in East Outer Mongolia which is sure to drive the market to dizzying heights or unplumbed depths, and stick with the darn plan, Stan.
The only time to buy or sell investment properties is if the numbers back it up. Stop being so emotional about your portfolio. And one more thing – live long and prosper.
The Creating Wealth Team
Flickr / puuikibeach
