Investments are down, but so are mortgage rates...

So the news is out, and the sky is falling (so to speak).  The stock markets are crashing and it appears that some people are panicking....again.

Why?

Well, really in Canada, the only reason you should be worried is if all your money is in stocks and you need to be liquid very soon (code for cashing out). 

Is this 2008 relived?  Maybe, but it may be the chance of a lifetime to make some serious moola!


Obviously this whole thing is a mess if you live off of your dividends from your investments as most of them are going pear shaped.  However, if you are smart and have some extra $$ floating around, it may be the best time to pick up a great deal on some stocks. 

Having said this, DO YOUR HOMEWORK and don't just buy what your friends are telling you is a good deal. 

Warren Buffett, one of the most successful investors in the world, buys at times such as these...and he '"buys what he knows".  What this means is he buys stocks, and for that matter, companies too (let's face it, he's rich), that he himself uses everyday. 

I think this is very smart.

Think about it, if you yourself are buying an Apple computer, how many others are also doing the same?  It makes sense to support companies that offer quality and staying power (for at least sometime anyway).  Why not invest in the back end too? 

Now the next question to answer is how to invest?  Really there are many options, from talking to an Investment Advisor to opening your own self directed stock trading account.  Here is a link to a Canadian Money Blogger that compares the different stock trading accounts available.

Don't overextend yourself, but realistically put in what you don't expect to get back right away and see what happens. 

As for mortgage rates, the fixed rates are based on the bond market (falling with the stocks).  There is an expectation that the 5 year fixed rates, will drop below the 3% range (it has NEVER been this low). 

This will be excellent for home buyers looking to save the most amount of $$ on interest. 

The savvy homeowner should also consider a refinance once the lower rates come in.  The savings of a lower interest rate could be substantial compared to what their current interest rate is. 

Also, re-negotiating your mortgage can offer a way of paying your mortgage off faster.  By budgeting a higher mortgage payment (based on a regular interest rate of 4% or more) and then having that extra $$ go directly onto the principal equity.  This can really be painless if you are already used to paying a mortgage payment based on your current higher interest rate.

If you have questions about possibly re-negotiating early on your mortgage, or would like to be put on my "Weekly Rate Minder" email, please drop me a line at: lizreid362@gmail.com  and I will add you.

Happy investing!

Liz