If it bleeds, it leads

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Or so they say in the newspaper industry.  And generally it’s true.  Bad news sells.  In fact last year I toured the country with my “Good News” road show because the amount of negative inaccurate press was getting beyond a joke.

I never expected that the recession could have had such an effect on the media that they would do an about turn on themselves but it appears they have.  Recently in various media across the country we are seeing continued optimistic reports regarding property/business and the recession.

I take more notice of the property articles because I know the industry and the market well, being actively involved in it.  And when you drill into these articles they are almost all being penned by people who have a vested interest in the market being talked up.  Now normally I would think that was a good thing but in the current climate it is irresponsible.  As I said in my last newsletter……..

“Secondly let’s address this talk of how long it will be before things get back to “normal”.  Normal is simply a setting on my clothes drier, there is no way to know what normal will be like in the future. One thing I am certain of after getting better educated on macro economics is this:

The last 30 years and especially the last decade has been anything but normal.  I talked about this in depth a couple of months ago but understand the credit experiment triggered by Nixon cutting the US dollar link to the Gold standard has run its course, and failed.

Everybody seems to be waiting for the current slump to end so that we can get back to the good old days of 3 years ago.  I think that would be nice too from an investing point of view. It was fantastic to be able to make money so easily in a rising property market.

But what if it never returns.  What if the nations governments actually recognise how stupid they were and rebuild a sustainable economy.  What if it takes 20 years before house values increase above 2006 levels?

The answer of course is we have to learn to operate in an environment where normal might be different.  We need to get educated and explore the wealth creation strategies that have worked in depressions, that flourish in bad environments.

All this insane stuff proliferating currently is very scary and people are getting pulled into high risk products using aggressive marketing techniques.

Tax lien products, “travel” clubs, sharemarket millionaire by lunchtime opportunities and a host of other “get rich quick” and “multilevel marketing schemes and scams are all over our inboxes.

Now I’m all for getting rich quick but we can’t use strategies like those above that 100% rely on high disposable income and a market returning to normal.

Sadly at a time when investing in good old boring property is the best thing we could do thanks to a tanking market and low interest rates, we are being bombarded with high risk rising market opportunities.

We are only at the end of the beginning of this depression, the good news in the media is just spin, DO NOT MAKE INVESTING DECISIONS based on a so called recovering market.  It isn’t happening, not yet anyway.”

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So just remember to be very careful at the moment. Don’t jump in to anything based on your brainwashing by the media.  Thankfully Kieran Trass has just come out today in New Zealand and stated the truth, that things are not improving, but his common sense will likely get lost in the next front page “property is recovering” lead article from the principal of some real estate company.

Keep your powder dry and Stay Safe ~ Dean Letfus @ www.MassiveAction.co.nz