There have been several Warren Buffett references in these posts, but I don't think this one has been mentioned (forgive me if I missed it), but I read a phenomenal biography "The Snowball" during the recent stock market crash and the best advice I gained from it was to buy when there is "blood on the streets." I think equities investing is the best way to take advantage of huge market downturns.
During the downturn I was finishing up college with a few real estate deals going on and I had little cash, but invested as much as I could in the market (financials were the best at the time) and more than doubled the cash I invested in less than a year.
I was a finance major and during my finance/business class lectures I would talk about my investments when we would discuss news in the Wall Street Journal. My professors warned the class despite my short term gains to avoid short term trades, diversify risk, etc.
At that time I would actively trade high volatility stocks and also hold.
It seems that even though economists know the market cycles, many are afraid to strike when the timing is right.
That said, I primarily invest in real estate because I have an advantage: know market values, have marketing in place to find motivated sellers, and it is easy to determine returns based on rental income. When you buy below market value you immediately create wealth.
I can't wait for another huge bear market when I can take advantage of everyone selling off perfectly good companies because their 401k decreased by 30+%. That may not happen soon.
I believe the stock market is a casino to those who do not take advantage of market timing, granted it is still a risk because it could theoretically go down to zero, but we all know that is not going to happen since our retirement plans are predominately invested in equities.
Full disclosure, I still have my wife get her full match with her 403b at all times in mostly the S&P 500 because a 100% immediate return is great and it beats most mutual funds. If you do not want to fool with higher maintenance investment classes that is definitely the best way to go.
Dave Ramsey and several other financial gurus tell you to be debt free and invest in mutual funds which is fine for most Americans. I think here at BP the investors don't mind spending the extra time to educate themselves and realize that real estate is a huge opportunity because it is truly an asset classes that benefits those that know their market. Where else can you by an asset worth $100k for $75k because there are trouble tenants living there? Real estate investors are problem solvers. :)
I know if I want to buy stocks worth $100k right now it will cost me $100k. The huge benefit (besides leverage and tax incentives) is the ability to buy below today's market value because of less competition/market knowledge.
