Originally Posted by David - PG

1982: You can't lose with gold. It will goto $10,000 an ounce!
2000: You can't lose with Worldcom. They will rule the multimedia + telco century.
2005/2006: You can't lose with real estate, even after prices are up 300% in some areas, inventories are building and interest rates (i.e. financing costs) are up.

Take a look at the chart of a leading residential home/condo building real estate company: http://finance.yahoo.com/q/bc?s=TOL&...=on&z=m&q=l&c=

Came down a sweet 55% in just 1 year. There is a reason for it. Investors are shitting their pants and have serious doubts if these RE companies can continue to haul in money sellling the same old beach front condos year after year.

People in some hot areas are already losing their ass (those with broder-line financing). It doesn't mean you can not make money here, the question is do you want to enter a market that tripled in 4 years and all variables are turning against it? There are markets (asset classes) that offer a better risk/reward ratio IMO.

Nobody can predict the future. Hell, who knows maybe US RE will appreciate another 300% in the next couple years? But... history just teaches one thing: All the parabolic moves come down, one day. Some come down hard and it takes 5, 6, ... 7 year for them to come back. Try to ride the trend, then jump off before the peak of the hype. Rather miss out on 25% of the gains than be burned for 75% losses.