Linda Leitz: Keep eye on the long term with investing, home buying | Business

Investment markets and the real estate market are going in opposite directions. The stock market has been in decline and real estate prices are climbing to dizzying heights. With interest rates starting to inch up, you might wonder how stocks and real estate will react. What to do depends on your situation.

If you are implementing a long-term strategy, keep your eye on the goal and take the long view. Trying to predict what will happen — especially in the short term — can be difficult and can distract you. If you want to grow your net worth over five or more years and you have living expenses covered and an emergency fund in place, now might be an excellent time for you to continue your regular investing in the stock market. It’s not about trying to figure out the perfect time to invest. It’s about consistency and keeping the long-term goal in mind.

If you’re several years away from retirement, you might even want to keep your percentage allocation in alignment by taking some of your income investments and moving them into the market. This is not speculation. It’s staying on track during volatile times. It’s ironic that most of us are willing to buy quality goods like clothes, vehicles, and electronics on sale, but when the stock market is down, there is an emotional tendency to avoid buying good mutual funds and even to sell investments at depressed prices. Be sure you keep your emergency fund intact. This isn’t about risking that money in trying to predict the market.

If you’re in the market to buy a home, it might seem like a tough time. For first-time homebuyers, it can seem especially challenging. Saving enough for a reasonable down payment while you watch prices increase is frustrating. If you have saved that down payment, you might wonder if you should wait for prices to come down. But there is no guarantee they will.

This is less of a conundrum if you are selling to buy another home. You are paying more to buy, but probably getting more in your sale. Rising interest rates, meanwhile, have led to rising mortgage rates, another challenge for homebuyers.

With the stock market and real estate market, long-term trends have been that prices increase. So if your time frame is long term, it might make sense to invest as you would during “normal” markets and hold on to your investments for the long term.

Linda Leitz is a certified financial planner. You can be reached at [email protected].