The current market can make investing feel daunting.
But successfully navigating a distressed market is not an impossible task. Would you believe me if I told you that you already have access to everything you need in order to find investment success in the current market? Sometimes the difference between a failed and a successful investment is just a few helpful pointers and the right perspective.
Here are 4 keys for calculating risks that help you actually find success in the current market:
1 – Use Technology to Your Advantage
In the past 10-15 years, technology has dramatically affected the market and the direction it is moving. Even though technology is always changing, it can be a huge asset when calculating your risks, especially if used wisely. Technology allows us to learn about different markets and make deals without actually being present in a certain location. You are now able to get 3-D floor plans, track traffic patterns, hire someone to fly a drone and send you footage of properties, and so much more. Today’s technology has opened the door to a new way of investing and taking calculated risks. It also allows us to form connections with others, which can boost our reach in ways that we never would have been able to even just a few years ago. Finding ways to have technology work to your benefit will allow you to stay ahead in investing and find greater success in your investment risks.
2 – Leverage Your Skills and the Skills of Others
I can confidently say that without leveraging my skills and the skills of others, I would not be where I am today. The only reason I was able to find such fast success with my calculated risks was that I leveraged knowledge, skills, people, and money. Even when I hit my lowest point, leveraging others’ knowledge helped me take the right calculated risks to get me back on track. It was as simple as going to a bookstore and reading books. When I started out in my investing journey, I truly believed that I had to be the guy that knew everything and could solve every problem. This is a dangerous way to take calculated risks. Over time, I began to realize the power of honing in and strengthening your skills while surrounding yourself with a team that has complementary skills as well. When you leverage others’ skills, it allows you to improve the calculated risks that you are able to take.
3 – Consider Investing in Hidden Markets
In every single market, there are multiple hidden markets. These can be spotted by studying different trends and how they overlap. For example, here are three trends that are happening right now that can help you make the right calculated risks for you:
- Baby boomers and millennials are not wanting to own houses–most people want to live in a house and not deal with the upkeep.
- Apartments are getting smaller–while apartments are growing in popularity in urban areas, they are now being built at an average of 600-700 square feet.
- Houses are getting larger due to cost efficiency– the average single-family house is around 2,600 square feet.
These three trends have all worked together to create a gap in the current market. Institutional capital is being aware of this and building 1,500-square-foot four-bedroom houses with small backyards that have the same efficiencies as multi-family management. This is an untapped market that has unending capabilities. Spotting hidden markets can take some time and creativity, but with the right awareness, anyone can do it.
4 – Make Calculated Risks By Studying the Trends in Other Markets
Studying other markets can be a gateway to predicting and understanding patterns in our current market before they actually happen.
Currently, in our market, we are seeing supply chain disruptions, changing interest rates, and the beginning of inflation. We can look at history and other countries’ trends to help us predict and understand the effects these things may have on our future. This information will help us take even better calculated risks. For example, if you are interested in understanding how low interest rates can affect a market, Japan is a great place to study. Japan has had elongated periods of low interest rates which can allow us to see how that may affect our market. Many of the issues we are seeing right now in our market have existed before. Revisiting our own market history can allow us to better predict the outcome of different trends within the market.
Investment success is not as hard to come by as it may seem. Take time to understand technology, leverage your knowledge, and look outside yourself and your markets. By doing so, you’ll take better calculated risks and find greater success. If you are interested in other tips for finding success and taking calculated risks, you might find what you’re looking for on my YouTube channel!
LinkedIn: Jake Harris
Youtube: Jake Harris
Thanks for the great article!