In 2004, it’s a safe bet that over half of the population in Florida never thought a hurricane would be an issue. Then, about a month later, back-to-back hurricanes, Francis & Jean came calling. Tens of thousands of people had their lives change almost overnight as the sister hurricanes displaced a significant number of people and racked up tens of billions of dollars in damage.
In 2005, it’s likely that most of the people in New Orleans were pretty happy they didn’t live in Florida where hurricanes were such a big concern. Then Katrina decimated the city, which 8 years later, still has not recovered from the carnage caused by the hurricane. Boy, were they wrong about the risk of hurricanes!
In 2012, most people in Northeastern states had little fear that an event such as a hurricane would directly impact their lives. Talk to the people that live along the shore in New Jersey and parts of New York to see how they feel now.
All of the above examples relate to just one of a myriad of potentially devastating events that lie in wait as people often ignore the risks that could impact their lives in the future. On one hand, that makes sense. Why worry about things you can’t control? On the other hand, If you don’t consider the “What If'” and “Is it Possible” events that could impact your financial and emotional security and they happen, you could be in for a rude awakening.
The most recent case was the Boston Marathon bombs that exploded a couple of days ago. How could we have known this could happen? The truth is, a significant risk has been with us for decades, or at least since the 2001 World Trade Center terrorist attacks. The problem is that after years of being exposed to the same risks, we get used to them. Eventually, they have minimal impact on us. That is what is called survival. Human beings have a tremendous ability to adapt and survive. That is good, but a different standard should be applied for investment purposes. Consider that the day after news of the bombing in Boston was released, Gold prices fell, 9.4%, their biggest one-day drop in 30 years. Just as newsworthy, The Dow Jones Industrial Average dropped 265 points, losing 1.8% of its value.
How is all of this important to Homeowners that are considering selling their homes? Although, the impact may not appear to be immediate, when an unpredictable event happens, it makes buyers more fearful of what the future holds. It also increases the impact that the next unpredictable event will have on prices. The point is, no one has a crystal ball. That’s why it makes sense to sell while there is a “Window of Opportunity” and the selling is good.
Buyers are still buying. Prices are good. Pigs get fat, hogs get slaughtered.