Tuesday, October 30, 2018

How the Fed's Policy Impacts Real Estate Markets

It's amazing how a bureaucracy can mess up a roaring economy 

From every angle, our economy was on the road to recovery.  For the first time in over 10 years, America was seen as a great place to invest from foreigners.  In September 2018, the Fed again raised interst rates for the 4th straight quarter in a row to 2.25%.   This is 2 percentage points higher than when President Trump took office.   This last announcement from the Fed to raise these rates have had a significant impact on the overall economy as well as the stock market and housing markets. 

What has been a great business climate and housing rebound, has suddenly become chaotic.  Stocks are up and their down.   Housing has certainly slowed and business are pulling back.     The Fed chairman and his yes-men think this is a good thing for the economy.  We need to "cool-the-jets" and have "controlled growth", is what they say.   What is supposed to be an invisible-hand with organic and raw growth, is yet again being controlled by government. 

It's no question the market has responded.   So what to do?

So, how does the savvy real estate investor respond to the changing environment?

Easy, two words.  Be cautious.   Ron Legrand once taught me that the most money you can lose if you lose your wallet, is whatever was in your wallet, therefore, and you can't lose big checks if you don't write big checks.  Today's investing environment requires prudence and caution.   Reduce debt, create free and clear assets where you can, and create more owner carry back opportunities.  Now is the time to position yourself for success into the changing climate, not once you're in the changed climate.  Act now.  Make decisions for the benefit of your portfolio.   We are.   I'll continue to post more tips as this market shifts. 

For now, make an impact and be grateful!

Coach Marc.


  1. we would love to see a follow up.. coach Marc being cautious is valid in all types of circumstances, all types of investments. Making decisions to benefit our portfolios is also a staple approach, I don't think anyone in their good mind would decide to make a conscious decision to harm their portfolio. Or are you simply saying, hold back and tune your risk threshold to be even more risk adverse in this volatile business environment.

    1. Great question Lucane, I'll address it in my next article.


I'd be delighted to consider your comment for posting