Tuesday, May 12, 2009

Yes, speculating is dangerous.

If you stood in line for hours two years ago hoping to pick up a pre-build condo when Alberta prices were going up - I hope this article isn't about you.

Builders are suing buyers who backed out of a condominium development in Leduc. Now that prices are softer and the condo sale price has lost value, going from $400,000 to $355,000, buyers want out.

Buyers put down $20,000 and are being sued for $75,000 - it's probably the most expensive line-up they've ever been in.

There are two kinds of investing, the first based on economic fundamentals and the other based on speculating. Of course you can turn a profit both ways but speculating will always be more dangerous. If these people are buying a home then the value is not so much in the price but the function it provides.

"Maybe I walked into this a little too fast, but they should have been looking after me," said one buyer. "I'm still interested in the place, but I want a fair deal."

It's your own job to look after yourself, investing is about responsibility and taking hard knocks when they come. How could they look after you? Fixing the market? No one ever complains when the make a profit.

Read Article here

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