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Tuesday, January 16, 2007

"The Strategy"

I mentioned to my mother that I was interested in researching real estate so I could be prepared to make a purchase once I have a steady income.  One day I found a book lying on my bed titled "The Strategy".  It was written by an author that wrote a book during the housing boom in the 1980s and he says his points about real estate in the 1980s no longer applied.

From what I have read so far, he brings up a lot of points that make logical sense and the centre of his strategy is focused on the baby boomers.  According to his statistics, 9.8 million Canadian baby boomers are set to retire during the year of 2011, that is almost 30% of the Canadian population right now.  Around that period, we should expect real estate values to decrease as these baby boomers try to sell their multi-floor and multi-bedroom homes and replace them with single floor and single bedroom homes.

If you are planning on buying a short-term home, if the author's theory is correct, now is the best time to buy a single floor and single bedroom home and wait and hope to sell it at a higher profit just when the baby boomers are replacing their homes to fit their aging bodies.

They will also want to invest their remaining capital in mutual funds and stocks.  With this extra capital being invested, corporate profits will increase and their shares will rise so theorically if you invest now, you will see your shares rise in prices over the next five or ten years due to baby boomers flooding the stock market with their money (due to a high percent of them not having saved enough money for retirement).

Just thought I would share what I have read in case you are interested in some outlook about the future.  The same can be applied in the United States since there are a lot of baby boomers in the United States too.

3 comments:

Buzzair said...

Guess that makes our parent's cottage good.

oneninefive said...

That could be true... Unless my parents retire and move there!

Leaving the task of selling their huge house to me. :)

Natech said...

Yeah, I'm looking into buying a real estate (a house). So, are you gonna live in Canada for the rest of your life?