Safety In Numbers

By Martin Skinner

The debate over our recovery from recession continues to rage and provides an amazing insight into the different ways economic facts and figures can be interpreted.  Forecasting is a tough game these days and I will simply express my opinion that we are experiencing a recovery more akin to a craggy[rock]-V than a W or an L for example.  This is based on historical rebounds and the remarkably rapid global response to the credit crunch in the following three key areas:

  • Loose fiscal policy through a) reducing taxes and b) increasing spending
  • Highly stimulative monetary policy (low interest rate) and
  • Vast quantitative easing campaign.

Even with this huge boost and my optimism we are being regularly rocked by shocks.  Last weeks’ Dubai debt crisis for example combined with end-of-year profit taking removed a good chunk of the years stock market gains.  Markets are nervous, investors are nervous, workers are unemployed and it’s going to take time for confidence to build.

So, in this uncertain climate how can investors profit whilst still hedging their bets against the downside risks?  A focus on location, cashflow and occupier demand will help.  Our chosen location is London where occupier demand is assured.  A cashflow boost is possible through servicing the undersupplied student and young professional markets (and multi-letting).  Demand constantly outstrips supply, rents are rising again and the low currency rate is tempting investors to the city.  Other strategies also work and the moral of the story is rather than running for cover each time we get hit by an aftershock we should be looking to adapt to the uncertainty/turbulence and push forward with an effective strategy and subsequently confidence in our abilities.

We will be exploring many of the issues involved in investing in student and young professional accommodation at our next event at the May Fair Hotel in London on the 11th February.  More details closer to the time.

In Other News:
David Smith – Alistair Darling’s balancing act: cut deficit or win votes
John Waples – Bosses’ bonuses will be next under the spotlight
Irwin Stelzer – Now Barack Obama gets down to work on job creation

And some funnies from the Sunday Times:

  • One for the naughty step – A masked robber who held up a restaurant at gunpoint was recognised instantly by the manager: she was his mother.  Jason Zacci’s face was covered by a bandanna as he threatened staff with a sawn-off shotgun and tried to grab cash from the till at the Wendy’s restaurant in Dearborn Heights, Michigan.  His mother also recognised the getaway driver, his girlfriend Amanda Yost.  (The Sunday Times)
  • To pee or not to pee – The mayor of Delhi has launched a campaign to stop people urinating in the streets.  Kanwar Sain wants to clean up the city’s image before it hosts the Commonwealth Games next year.  Posters have been stuck up around the city urging: “Don’t be Mr Wee-Wee”.
  • Trucker chisels DIY tunnel – Ramchandra Das, a lorry driver, used a hammer and chisel to tunnel his way through a mountain just so it would be easier to park his truck.  The 53-year-old from Bihar, India, took 14 years but said it was worth it. “I had to leave my truck miles away, so I decided to do something about it myself,” he explained.
  • You may now Tweet the bride – Forget kissing the bride; an American groom, Dana Hanna, had a better idea when the minister declared the couple man and wife.  He whipped out his mobile phone and changed his Facebook status from “in a relationship” to “married”.  He then sent a Twitter message, “Standing at the altar with @TracyPage where just a second ago, she became my wife! Gotta go, time to kiss my bride.”  Before that, however, he handed over her BlackBerry so she could do the same.  Hanna, a software developer from Maryland, said after the service: “This was just done to be funny.  We really don’t Facebook that often.”
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