From time to time, I like to review my previous blog posts. In an enlightening interview I done with Gerald Tay of Conspiracy of Real Estate Investments (CREi) Academy Group, I realized how accurate his predictions were in 2013. Check out my old article here.
As a wealth builder, I have deep respect for Gerald Tay because he was born to a rich family but subsequently had to start from square one because of some unforeseen family financial difficulties. As a result, his perspective is unique as he knows what it is like to be rich and poor. Below is an eerily accurate predictions made by Gerald in 2013 from my interview with him:
1) The world economy might be headed for a major financial crisis, making the 2008 financial crisis look like a chicken in a coup. Major economies (China, USA, Europe, Japan) are supported by a large quantity of ‘phony’ money printed endlessly by their governments. Instead of turning the economy around, massive debts are sending these nations towards default, and there’s no escape from a market crash in the future when you have such enormous debts.
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2) Even if there’s no such catastrophic event mentioned above to happen anytime in the next 5 years, there might be some ‘black swan’ event that might just tip the balance and burst the asset bubble, especially in Asia. The ramifications could be severe enough for our Singapore property market, especially when prices are already at ‘bubble-pricked’ levels.
3) There’s a high possibility of interest rates going up, once markets realised that the bonds which they hold might never be redeemed by broke governments. Although higher interest rates have never been the sole catalyst for property prices to fall, they do have some impact nevertheless.
4) For the next couple of years, as long as governments and central banks can continue to convince markets of their ability to restore economic growth and certainty through their ‘asset enhancement’ program (money printing), investors (large institutions) will continue to push more money into the system, especially into Asia and asset prices like property may continue to rise or stabilise with more cooling measures ahead.
5) By 2016 in Singapore, there will be a huge supply of at least 200,000 new residential units coming into the market, both from HDB and private. You have to ask if there will be enough money supply in the market by then to absorb especially for those who hope to sell for capital appreciation. In the commercial sector, rental is one of the most expensive cost components and should there be a financial crisis (high possibility), which businesses can afford to pay high rentals then?
Gerald Tay hates to predict future market trend and instead prefers to be pragmatic in his investment approach. I like his saying “opportunity is when knowledge meets preparation” because I believe in acquiring the right knowledge for investing as well. If you want to be rich, don’t just follow what the gurus said. You must be your own man and learn the rope on how to invest.
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