Some valuable data were recently released in Rental vacancies lowest on record published by The Australian. In short the article argues that vacancy rates in Australia are at an all time low, interest rates are likely to raise, Australians are richer than ever before yet the consumer sentiment is on decline.

From where I stand, it all looks quite confusing indeed and my thinking process goes on the lines:

Oh vacancy rates are lowest ever, wow, lets look around for some investment property as the yield is surely to be pretty good
but wait
the interest rates are on the rise so the interest payments on the loan are going to go up so I better use very little of the borrowed money
but wait
without decent loan I can’t really afford any investment property so maybe I just buy some shares
but wait
the Australian share market is at an all time highs and surely its stellar rally can’t go on forever can it?

I would say that in times like these a huge potential exist for very unwise investing decisions. If the “trigger happy investor� with lots of available cash thinks, that his money must be promptly reinvested, now is the time for him to reconsider and take the extra time thoroughly analysing each particular investment opportunity which may cross his path.

And, as always in investing, if one’s analysis regarding the future prospects of the investment shows an inconclusive result, one must not be afraid to pass.

And giving a miss to the current investing environment is, in a sense, what I am bound to do myself. In the foreseeable future, I will more than likely sit on the market sidelines watching the buzz and thinking to myself that “cash is king�. All that while my “investing cash� is compounding hard in one of my favourite online savings accounts (by the way the interest rate returns on those do normally shadow the RBA interest rises too).

After all, follow the advice of W. Buffett in looking for the one feet hurdles you can step over rather than trying to jump over the seven feet ones.

This entry was posted on Saturday, April 21st, 2007 at 2:42 pm and is filed under Miscalleanous, My View. You can follow any responses to this entry through the RSS feed. You can leave a response, or trackback from your own site.