Grant Trevithick Addison Real Estate Investor Pro Tip

It’s never fun to navigate stormy times, but economic downturns are just as much a part of investing as sunny upturns. Smart real estate investment strategies will keep you steady despite rough waters. The rollercoaster start to 2022 might have made you anxious about your investments, but the experts like Grant Trevithick know exactly how to weather an economic downturn. Here’s what you need to know about today’s economy, including how to manage your existing investments and where to put your money next.

Don’t repeat the mistakes of the past

When I asked Grant Trevithick Carrolton Real Estate Investor about his advice for investors who haven’t weathered economic downturns, he had—unsurprisingly—a lot to say.“As investors, we must always remember that things are never as good or as bad as they seem,” Grant says. During the bad times, “We have to remind ourselves that the economy, the markets, and real estate itself is cyclical. It will get better. Things will return to normal, and we must make good investment decisions that will prepare us for when that shift back to ‘normal’ occurs.”Hindsight is important for the good times, too. “When it seems like the party isn’t going to stop, when it seems like real estate prices will never stop going up, we need to remind ourselves that every bull market has an expiration date,” Scott says. “As difficult as it can be to remember what it felt like last time, we must try to put ourselves back in those shoes so that we can adequately prepare ourselves for an unavoidable period of angst and uncertainty.”Ready to prepare yourself for a successful financial future? Here’s how.

Protecting your investments during an economic downturn

Grant Trevithick also went on to explainNobody ever feels adequately prepared when markets become unstable. The news flow comes fast and furious, and some people make living peddling fear out of self-interest, compounding investor anxiety. Every investor should practice patience in times like this.Economic downturns present a valuable opportunity to revisit your allocations and your investment timeframe. Remember: Time has always rewarded consistency with strong returns in stocks, bonds, and real estate.

Patience prevails

Grant Trevithick has been doing Real Estate in Carrollton, Dallas, Fort Worth, Irving, and several counties all throughout Texas. Over the decades of doing Real Estate, one thing has been true, being patient always worked.Being a long-term investor means staying invested even when the market is in turmoil. In an average year, the S&P 500 has a decline of at least 13% at some point on the calendar. Yes, this decline is certainly steeper than most, but if you make regular contributions to a 401k or an IRA funding program, your next monthly contributions are buying more shares for the same amount of dollars.Here’s an example. Let’s say you own 100 shares of stock. They were worth $50 per share at the beginning of the year, making your investment worth $5,000. If the stock falls by 50%, your investment is now only worth $2,500—but you can now buy another 100 shares for only $2,500 more. When the stock eventually rebounds and returns to $50 per share, you’ll own $10,000 worth of stock, with a cost basis of $37.50 per share (half at $50 per share and half at $25 per share), and you’ll have earned $2,500 on the position.This process of investing the same dollar amount in stocks or funds at specific times, regardless of what the market is doing, is called dollar-cost-averaging. This method is the most efficient way to invest in the stock market, assuming you plan to participate for 10 years or more. It takes the emotion out of the process and allows time to be your ally. And opportunistic investors with long time horizons even come to appreciate finding the stock market on sale!Worried about your 401k? If you’re not retiring soon, make sure to keep contributing at minimum whatever percentage your employer is matching—these contributions are on pre-tax dollars and it’s just too much benefit to pass up. You are literally getting a 100% return on any matched amount your company contributes—even if you have to wait for that contribution to vest. And if you are close to retirement age, your financial plan should already include at least 60% of your assets in risk-averse, fixed-income securities. Most bond funds have held up very well so far in 2020, with some even putting up strong gains as investors fled stocks and searched for safer pastures.Economies and stock markets work in cycles, and every prior bad cycle in the history of time has worked out just fine, rewarding committed long-term investors. In fact, the most successful investors use market downturns to sharpen their education, expand their toolkits, and prepare for the next opportunity. And they never make rash decisions.Let me repeat that for those in the back: They never make rash decisions.Markets fall. Economies run in cycles. This is inevitable—but your long-term investments won’t suffer, as long as you remain committed to strategizing and improving your financial education.