“Property Price drop over 20% unlikely”. You want to GUARANTEE what you said?

I kept getting the sense that I was reading some horrible episode of Scooby-Doo where the villain prolongs his victory speech and reveals his methods over and over, only to be foiled by revelation.

There are many so-called experts in the real estate world from “Get-Rich-Gurus” to real estate agents. Many professionals in the real estate field have vast knowledge of the industry but have NOT the subtlest idea how to invest in real estate.

The fictional movies of James Bond is familiar with many – a character made up by a FAILED British spy. The movies just weren’t the real world.

And similar analogy is market predictions versus real world investing.

The opinion “a price correction of over 20 percent is improbable, given that demand rises as properties become more affordable, preventing prices from falling further” tells a naïve understanding of a complex Singapore real estate market works.

Everything in fiction was simpler than the real world. In the real world, zipping your zipper could be harder!

I’m sure you’ve heard the popular saying…

“The trend is your friend.”

And also variations of it, like…

“The trend is your friend… until it ends.”

And my personal favorite…

“The trend is your friend… until it stabs you in the back!”

The idea here is simple: following along with your friend, the trend, is usually beneficial.

But every once in a while, and without much warning, your “friend” will desert you.

Fore-telling what we want to hear: “The Property Market will continue to rise by another 10% by the middle of next year.” (Mohammed Ismail, CEO Propnex in late 2007 before the severe market correction of 2008)

Another failed prophecy by a gold “expert” in end 2012, “Gold price will hit $2,500 per ounce by end of 2013’.

Whether the experts are wrong or right in their predictions of the future is just another a case left for a debate, rather the more worrying problem we should be concerned is ordinary investors are simply taking those predictions right off the book and simply invest based on what the experts (or other people) say.

So if an expert say the property market will rise and reached certain levels this year, unwitting investors will just jump the gun and start queuing at property show-flats and buy – like a herd of lemmings.

One of the greatest popular myths about investing in property, stocks or other investments, is that in order to be successful, you must be able to predict the market’s movements. Why do people assume this is beyond my utter comprehension!

People consider experts as superior beings while forgetting that they are normal human beings who have the same mind that any human being has.

What most experts fail to notice is that past experience is never an indication of future results.

Just watch how experts give recommendations about stocks and you will laugh. When they recommend a stock that keeps falling they shortly change their minds and recommend selling it and when it starts going up again they quickly recommend buying it.

There is another old adage that is very much worth repeating: “What’s obvious is obviously wrong.”

This means that knowing a little bit and simply tagging on the advice and actions of others will only have you following the crowd like a lemming.

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About the Author

Gerald Tay Author, entrepreneur, professional investor and loving father, runs with a tongue-in-cheek approach to property investment - and himself. He is widely regarded in the industry as 'The Common-Sense' Investor. Gerald writes with passion and straight-forwardness, disclaiming wild claims and impractical investment strategies behind lies and ignorance pervasive in the property industry for vested interests. His well-known statement, "All I did is to value my investments with science, logic and common sense.'

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