I was talking with one of my relatives, who is very successful in the real estate industry, and we were pondering the question (or I was at least). Is there really such thing as a “bad market?”
My relative continued to pound in my head that anybody can make money, but in a bad market only the skilled can. He took the housing market for an example. Just a couple years ago, everybody including the neighbor down the street was able to buy a house and flip it; however, now many of those same people are finding themselves stuck with an extra home and/or losing money. On the other hand, you have “experts” in the field who are looking to buy properties real cheap or find some other way to continue to still make the same great living off real estate.
He said that this is the time when people can really began to make a name for themselves, and during these “bad markets” investors are allowed to be creative, which allows for innovation within market. Overall these trends help to make the next cycle even stronger, and it keeps things interesting (apparently these rich people like a challenge)?
So I tried to correlate this with the stock market, for which I interact the most with, and it really does make sense. During pretty much two-thirds of 2007, anybody could pick a stock and make a fortune; however, as the year continued on, suddenly the same rules weren’t working. Again, to be successful, you had to be creative and innovative (at least in my own experience), thus, it allowed my growth of trading knowledge, to better me for the future. Now I am currently experiencing the best month of my trading life.
So what do you think? Is there really such a thing as a “bad market” (not in the literally sense obviously)?