Archive for July, 2009

Investing in Commercial Real Estate: now is the time

July 29, 2009

Many people believe that the real estate market is risky, while the stock market is sound and showing good results. But is that really the story?

The government bailouts have created a false economy; they have buoyed Wall Street and banking, hiding the true condition of the stock market.

How can this be true? According to analysts, the government, you and I through the Chairman of the Federal Reserve Ben Bernanke, have bought U.S Treasuries and mortgages to the extent of increasing the monetary base by $1 trillion dollars. That money, to a great degree, has gone into the stock market – and not into the economy that produces wealth by actually producing something. As one analyst, Andy Kessler said, “Ben Bernanke has been the market.”

Further, according to other analysts, a $2.7 trillion increase in equities in the stock market was matched by a $400 billion decrease in money market accounts.

What accounts for the $2.3 trillion difference? Bailout money.

One conclusion that can be drawn is that the stock market may not be as sound as it appears, while commercial real estate, which can be bought at favorable prices and with favorable financing, is. Many analysts predict that in coming years we will have severe inflation in order to pay off all of this deficit spending. If that happens, commercial real estate could be the best producing and safest place to have your money.