An event such as the World Trade Centre attack makes all of us stop and think.
From a personal perspective you may well do some soul searching and evaluate life goals.
Financially you need to look at the potential impact on your investments and safeguard your finances as best you can.
Share markets all over the world have taken a severe setback founded on the fear of what may come and large institutional investors seeking minimum loss positions. It is unfortunate that there will always be a level of opportunity from any crisis and the stock market is the most visible form of this.
Holding your shares through the crisis may not only be a sensible option, but the only one available if the stock has already fallen to unreasonably low levels.
As always, when things are volatile, quality assets provide the best level of security for the investor. This is true of shares, property and all other investment assets.
Australian property may well be considered somewhat of a safe haven in the current turmoil, if such a thing can exist at a time like this.
Australia’s stable political environment, remoteness and high security and immigration standards should act as a significant buffer from most of the events.
Notwithstanding this, there are some other key areas you should address in order to reduce the exposure to risks brought about by the prevailing market conditions, so we have prepared this summary to assist you.
DON’T OVER REACT
The most important thing you can do at such a time is try, as best as possible, to live a normal life.
This will keep all economies moving, albeit at a slower pace.
The events have happened and nothing can change them. We have to ensure that we do not let the intent of the attackers, to cause maximum disruption, to be achieved.
DON’T SELL FOR THE SAKE OF SELLING
Selling of any asset at a reduced value is not considered a wise move, unless other factors are prompting the sale such as the instability of the asset itself, rather than the environment now created.
You should avoid selling of any quality asset at this time.
Buying may prove more opportunistic in the current climate, but should be done with proper research and assessment of the financial and political up and down side exposure.
LOOK FORWARD NOT BACKWARDS
Regardless of what has and may happen, the future will always hold hope.
This is true for your investments as well, and you should examine long term prospects and benefits and seek comfort and security in this information.
MAINTAIN LIQUIDITY
Do not reduce any of your current loans.
This is particularly true for your Australian investment property where any reduction may have a long term impact on your tax position and return ratios.
Also the Australian dollar has shown some additional weakness which can be expected whilst people focus on primary currencies such as the US Dollar.
If you are holding surplus cash reserves, maintain them as liquidity is an important aspect of surviving any adverse financial market.
Debt reduction shall prove no advantage at any time of financial disharmony and the benefit of holding cash reserves cannot be underestimated.
Cash gives you choice, and choice gives you opportunity to make profits.
REVIEW INTEREST RATES
We have already seen interest rates fall as a result of events occurring
Now is a critical time to review your interest rates and seek to minimise your costs.
Governments around the world will look to stimulate markets and encourage investment by lowering rates.
This may prove to be a boom for both the existing and potential investor.
TENANCY TERMS
It is appropriate to check the term of your properties and, if applicable seek to extend or renew.
Having an assured, contracted tenant is a great advantage at a time of uncertainty.
The focus at this time should be on occupancy rather than high rental value, so if you have a potential vacancy, be reasonable about your asking rental.
In summary, you are somewhat fortunate that you have invested in Australian property as it should hold its value even with all that is going on.
Now is a good time to review your holdings but you should make decisions in a calm and positive manner in order to achieve the best long term result.
No one could, or should, underestimate the potential impact of the World Trade Centre attack on investments globally.
How long it will take for stability to return is impossible to predict, but there is no doubt that things will have been changed for the better if we use this as a catalyst to address and resolve many problems around the world.
A level of maturity seems to have prevailed over all governments in their solidarity against terrorism and a new found ability to communicate, assist and importantly, trust one another.
Once the issue of justice has been dealt with for the sake of humankind, this new solidarity will stand as the one of the greatest incentives to global investment we have ever experienced.
