Profit from Collective Strength

If you read the papers or watch TV then you could be forgiven for being a bit confused by what is going on in our economy and in the world economy in general. We were told that in 2007 our global financial system almost melted down and that we came within a hair's breath of being bombed back to the Stone Age. This phenomenon quickly became known as the credit crunch and was apparently caused by the reckless use of credit to support already over inflated markets. All well and good, except that instead of heralding in a true era of austerity and good housekeeping, things have carried on pretty much as usual. True, unemployment has gone up and there has been a halt to reckless lending to consumers and businesses but we certainly have not seen a collapse in consumer demand or any sign of a long term depression, all good news then?

If only we believed that were so, you see, if you peel back the thin veneer of the current economic revival you will see that it is entirely supported by Government stimulus which is another way of recklessly using credit to support already over inflated markets, sounds familiar doesn't it?

So either the Politicians have finally worked out a way of getting a pint out of a half pint pot, or there is likely to be further trouble ahead, hmm time to bury our heads in the sand, or perhaps not.

Although we think there will be another wave of financial hysteria to come, we also think that by acting intelligently now, it is possible to preserve capital and even add to it, doing nothing however will, in our opinion, lead to your savings being wiped out in real terms by the inevitable hyperinflation which will mark the real end of this economic cycle.

We can read your thoughts, you are thinking 'Oh yes, but what is going to cause this coming catastrophe, we bet you can't tell us that' well we think we can. We believe the catalyst will be a rise in the inflation rate followed by a rise in interest rates, setting off a spiral which will end with inflation as the winner.

To preserve the value of your savings, you will need to find a safe haven and there are very few of these. Gold is being touted as a store of value but in reality it is really just another vehicle for a new bubble. In our opinion it's true that gold will probably continue to rise for the moment but when it falls we think it will crash to earth taking most investors with it.

There probably will be money to be made in the Stock Market, if you get your timing right and you pick the right companies but for anyone not in the know we think the Stock Market is a minefield best avoided.

In addition to these negative factors regarding cash, commodities and Shares, there is the additional problem that you can't borrow to buy them so you don't benefit from gearing. Wealthy people don't need to worry about this issue but anyone trying to build financial security from a small savings base does. Remember we think inflation will rise faster than interest rates so gearing up to buy property will continue to make sense when done sensibly.

So to conclude our analysis of the situation, if you are wealthy then it is worth diversifying but be very careful, if you are not wealthy then keep a bit of liquidity for contingencies and use your capital to buy property.

So what will 2010 have in store for the property market? Well one thing we can promise is that most things will stay the same. Property will remain the long term investment of choice for most people looking to achieve financial security. Equally, it will remain crucial to buy the right property at the right price and therefore we anticipate continued demand for our services. After all, you don't have to be Einstein to realise that when it comes to buying property as an investment you are better off with our help than going it alone.

But hold on a minute, things change, they move on and develop and for those of you who follow these missives you will know that occasionally we reveal an insight that shines a light on the changing dynamics of the market. This works in both a positive and negative sense, for example, as early as 2005 we were warning our clients about the risks of off plan, in particular we steered completely clear of the city centre off plan bubble that caught out so many greedy or naïve investors and lined the pockets of some now infamous advisors. Then last year we identified the great opportunity that existed to buy up brand new distressed apartments in these very same developments at bargain prices we negotiated for bulk purchase.

However we also pointed out that because there is hardly any new building projects going on, that the opportunity to buy these brand new bargains would not last forever and it has not. There are still some opportunities out there but prices have already risen and we think getting the right brand new stock will get more difficult as we move through 2010. So what do we replace it with?

Well apart from our staple below market property distresses sales, we have also become authorised for sale and rent backs and we will continue to present you with these high quality second hand property buying opportunities.

2009 saw us significantly expand our contacts with receives, banks and asset managers, we know the progress we have made has come as a result of our track record of delivering serious buyers who act fast and perform when they say they will. The brilliant thing being that as our reputation with trade sellers grows; we get more and more opportunities for our clients, what we call a virtuous circle!

But there is more, because of the halt in new build land has seldom been cheaper or in more plentiful supply, a situation that wont last, why? Because we have to build to support our growing population and the recent downturn has done nothing to change the demographic fundamentals, or the macro economic imperatives (the big picture to you and me).

Better still, we are seeing a lot of building plots where the current owners have spent a fortune going through the planning process and have run out of. This is a huge benefit for a new purchaser as it means the project can go ahead quickly with a lot more certainty. We have found building plots with detailed planning permission, drawings and estimates that can be bought for at less than the sellers will have paid for the land alone.

We are so convinced that this situation is a great buying opportunity that we are prepared to put our money where our mouth is which is why we intend to enter into a limited number of Joint Venture projects with selected high net worth clients during 2010.

In order to be considered for inclusion of one of these projects you will need a minimum of £100K capital which you should be prepared to commit for a period of 18 months to two years, in return you will receive a proportionate percentage of the profits when the development is sold, or take first refusal on some of the completed properties at cost price.

If you are interested in hearing more please contact us, but in the mean time, may we wish you a happy and prosperous 2010.

Choices Acquisitions and Investments

01342 840050