The current COVID-19 situation has the economy shrinking, businesses closing, and many jobs disappearing. It’s no secret that this is a very uncertain time for many workers, business owners, and investors. As one of the most experienced and knowledgeable commercial real estate companies in Chicago, we want to provide you with some advice and strategy for investing in uncertain markets such as these. Read on for some tips on how to keep your eyes on the big picture despite uncertain variables.
1. Keep a Diversified Investment Portfolio
Creating and maintaining a diversified portfolio is one of the basics when it comes to investing, and uncertain times make this practice even more essential. If you’re unsure of how to effectively diversify your real estate portfolio, contact our expert team for more insight. Here are a couple of things to consider when diversifying your investments:
- Consider selecting a mix of mutual funds in stocks and bonds. Keep a sufficient amount of investments in money market or cash equivalent mutual funds, or other liquid assets so you can meet any short-term needs.
- Include international funds. Non-US markets have a tendency to cycle on their own.
Diversifying your portfolio does not guarantee a profit, but it is a great investment rule to follow when investing in times of uncertainty.
2. Get Professional Advice
Although it may be tempting to do, try and avoid making any big, quick decisions on your own. Meeting with commercial real estate companies in Chicago, consult your financial advisor, and be sure to come prepared to share all of your concerns. Investing in commercial real estate is often a long-term ordeal, so avoid making any decisions based on your emotions, or related to a single event.
3. Keep Your Short-Term Income in Mind
As we stated above, it’s important to consider short-term commitments in addition to the long-term. Mutual funds that stress the role of dividends or funds that produce steady interest payments may be a good investment for you. At all times, especially in times of crisis or uncertainty, income-producing investments can serve as a bit of protection for those dips in the market.
4. Invest in Both Good and Bad Times
While no strategy can ensure a profit or protect against inevitable losses, keeping a mindset and habit of regular investing can mitigate the risk of putting all of your money into the market at the peaks. Reactionary investing at the hint of good news, or fearful action at the hint of bad news, often proves to be an ineffective, risky strategy. Consider focusing on shifting your mindset during a down market from fearful to opportunistic.
5. When Possible, Avoid Quickly Jumping In and Out of the Market
Perfecting your timing can be extremely difficult because it requires two near-perfect actions when getting out and getting back in. Successfully coordinating both of these actions tends to be nearly impossible. As a result, many investors end up buying high and selling low. When working with a complex real estate market, coordinate your actions with experienced professionals.
Contact Our Team Today
At Frontline Real Estate Partners, our expertise and experience encompass all aspects of the commercial real estate market, making us one of the top commercial real estate companies in Chicago. If you are interested in investing during an uncertain time such as our current situation, please feel free to reach out to our team for help developing an effective strategy. We look forward to providing you with timely, meaningful feedback.