Stock Market, Interest Rates and REI

[Adrian L.]

As a newbie eagerly looking for his first buy and hold multifamily property, I'm trying to evaluate the direction the market is heading and wanted to get your opinion.

My concern is buying too high with a possible impending shift in the stock market.  As investors in real estate, we should keep our eyes on market volatility and trends since it may be beneficial or detrimental depending on when you buy. 

Interest rates, stock prices, employment and real estate seem to be closely tied together and if you ask me stocks are currently artificially inflated by money being printed like crazy, while wages have not kept up with the rising cost of living (including real estate).  

With interest rates sure to rise, I'm curious to see how the inflation comes into play as well.

Check out this chart that shows a where we are now and the dot com bust and the great recession that bottomed in 09.

http://stockcharts.com/freecharts/historical/spx19...

Either way, I feel real estate is a great hedge against stocks, but also aware they are susceptible to other economic factors. I realize these are some of the possible pains of a buy and hold investor, but I'm also thinking in terms of exit strategy.  I have some cash and want to ensure it is properly placed in RE.

What are your thoughts on this?

Good luck to all!

Adrian Lopez