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May 05 , 2011

Alan Shor: Why Investors Should Take a Cautious Approach

Alan Shor: Why Investors Should Take a Cautious Approach

By Christine Perez
Managing Editor, D CEO

May 5th, 2011 7:41am


It appears that most business markets, including real estate, have made a dramatic rebound from this most recent recession. But will this rebound last?  Or are there caution flags that investors should look at going forward?

People are feeling better about their stock market investments, the ability to get bank debt, and growth in general.  But, here are five reasons why we should remain cautious:

•  Unemployment is still near its recent highs of 10 percent, with a prospect of significant job growth remaining bleak.

• Inflation has become a threat in both the United States and abroad.

• Although access to the debt markets has eased, banks are demanding greater equity and less risk, thereby transferring risk to the borrower.

• Oil prices remain near all-time highs, resulting in extremely high gas prices and less discretionary spending by the consumer.

• External factors, such as unrest in the Middle East and the natural disaster that struck Japan, are impossible to predict.

For these reasons, those of us in the real estate investment business will continue to make our investments, but with a cautious and responsible approach.

Alan P. Shor co-founded The Retail Connection LP. in 2004. He serves as president and co-chairman and heads up the firm’s investment and merchant banking business. Contact him at ashor@theretailconnection.net.

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