20090924

The WIG Index fell -0.41%:



The market lost some points, but still above the level of 38000. Also, the yesterday's gap has been closed. Oscillators are confirming the rally.
There is not much to say - we should be using our strategies to enter trades (always with stop-loss orders).

Quite interesting article about volume's interpretation (here).

Prime Minister Donald Tusk criticized Fitch Ratings agency's report, indicating the Poland's state of public finances has worsened (here or here). Bossa.pl published an interesting article on objectivity in rating agencies (here).

Note:
Lately I have received few questions about polish mortgages.

The most common question is if to buy now. Generally speaking, I believe the answer is yes. Unfortunately, this is not so simple, but I will try to show my point of view.
Firstly, the Polish real estate market was not hit hard by crisis; it's my subjective opinion, but compare -10~15% loss of value in Poland (here) vs. average -20~40% loss of real estate's value in United States (here or here).
There is also government's mortgage subsidization program ongoing (polish: "Rodzina na swoim", here), which helps preventing further price drop. That gives us good economic base.
There are three most important things in every real estate's investment: localization, localization and localization.
For investment purposes we shall consider developed cities (like Warsaw, Cracow, Wroclaw, Poznan, etc.) with already developed infrastructure, liquid real estate market and many potential tenants.
The real estate has also its maintenance costs - manager's fees, reparations fund, rent-tax, land-tax, electricity and other utilities, etc. Even, when you pass most of those costs to inhabitants, there will be some amounts to be payed by you.
Also, don't expect the property to be rented the full year - people tend to change places ca.2 years. Moreover, you should visit your property from time to time to check if it is not being damaged by tenants.
Another issue might be available credit options. Unfortunately, not many of us have enough resources to pay for a property in full. Good summary of available credit options can be found here.
Nowadays, the interest rates are quite high (4-6% + LIBOR), I believe they shall go lower soon. However I don't think we will have good offers (like 1% + LIBOR) anytime soon.
Buying real estate is quite complex process and it requires considerable amount of time later. You shall not rush into it and it has to be well thought-out decision.
At first, check if you have enough resources and spare time. Make realistic assumptions - the property prices and average rents can be found in few portals (i.e.: szybko.pl, www.nieruchomosci.pl, www.emieszkania.com.pl or local agent www.nieruchomoscidolnoslaskie.pl) and try to forecast expected cashflow and calculate return of interest.
Being a rentier is not an easy, however the real estates offer a lifelong and stable income.

Sources:
[http://www.bloomberg.com/apps/news?pid=20601085&sid=afhO5.tZlbY8]
[http://blogi.bossa.pl/2009/09/23/agencje-„obiektywizmu-czy-agencje-„sprzecznych-interesow (via Google Language Tools)]
[http://www.parkiet.com/artykul/7,851975_Tusk__Fitch_nieadekwatny.html (via Google Language Tools)]
[http://investmenttools.com/median_and_average_sales_prices_of_houses_sold_in_the_us.htm#median]
[http://www.egospodarka.pl/44808,Rynek-nieruchomosci-w-Polsce-IX-2009,1,39,1.html (via Google Language Tools)]
[http://seekingalpha.com/article/159037-lehman-s-130-billion-loss-went-out-with-the-market]
[http://www.rodzinanaswoim.pl (via Google Language Tools)]
[http://www.najlepszykredyt.info/pozyczkihipoteczne]
[http://www.swing-trade-stocks.com/stock-chart-volume.html]