It is no denying that the recent and sudden economic shifts in the new normal have ushered in a buyer’s market period. This means as the term implies: the period where the market has more supply than demand so buyers have the temporary leverage on lowering prices of purchases.
The economy is still on a downward trend but is poised to jump back up as soon as the outlook on overcoming the pandemic becomes positive. We are currently in a buyer’s market. If ever you have extra savings or you want to take advantage of the buyer’s market period, here are smart buys you can do:
- Real estate properties
- Foreign currency
- Non-essential business
Real Estate Properties
The term buyer’s market originated from the real estate industry whenever it has more houses to sell that potential buyer. This might be a good time to invest in the properties market as there is a good chance that the selling price might be lower than the market value. With the pandemic temporarily stopping any major purchases like real estate, it is more likely that you can get a good price if you’re thinking of investing in it.
Why is it a smart buy? Properties tend to appreciate their value. By the time that the economy normalizes, you can either sell, lease, or use it as collateral for a higher value than when you bought it. You can also choose to use the property to build your home or open your business. The bottom line: you secured an asset at a lower cost, potentially giving you capital gains in the future.
While vehicles do not appreciate in value like real estate properties, their prices have gone down significantly this year. Some are even doing buy-one-take-one promotions–something that is seldomly done for high-value purchases like cars.
So if you have extra cash, now is a good time to invest in a car. You can use it for personal or business use. You can even sell it at a later time when the economy normalizes at a price based on its market value. It would be worth more than what you paid for.
This is also a good time to invest in the stock market if ever you were planning to do so. Most of the stock values have gone down given the current economic climate.
As we have said, the economy will soon rebound so buying stocks at their current prices will earn more for you in the future when it’s time to sell. This is also the time that publicly listed companies would need more investments as they handle the economic situation brought by the pandemic. If you have extra money on which you don’t know where to put, invest in stocks. Stock prices aren’t likely to get any lower anyway.
But if you’re still hesitant to invest in stocks, a less risky option would be investing in the foreign exchange market. It is not as intimidating as it sounds. You can start with your extra savings, buy foreign currency with it, and then sell it back once the value of the currency rises again.
Now is a good time to invest in this. Philippine peso is at its strongest in almost 4 years. Of course, investing in foreign currency means you’re betting against our own currency. So, make sure you are ready to sell when the exchange rate has reflected the realities of the market when it is back to its economic fundamentals pre-pandemic.
It might be risky to open or invest in a non-essential business during a pandemic, given how these enterprises have suffered or survived in this period. But if you’re a risk-taker who’s up for a long play for economic returns, investing in these businesses is a smart move.
You can open up your own–for example, a bed-and-breakfast or a gym–by spending less than what you would normally spend given the market’s prevailing prices on non-essential items. It might take time to operate and earn fully from the business but it will be evened out with the costs you saved in putting it up. You can even invest in a non-essential business; the value of their businesses would be lower at this time so you might gain more share for your money once the business is fully functioning again. Plus, you might be instrumental in extending that business’ life during this pandemic.
All in all, the buyer’s market essentially gives you the advantage as a buyer to invest in high-value investments you normally would hesitate spending money on. Seize the chance of this relatively less risky time and reap the rewards once the economy shifts back to its real state.
Need additional capital for your buyer’s market investments? Make #TheSmartMove and give us a call.