By no means should a serious investor ever follow the crowd. Either you lead it or you go against it. Those are two strategies that make money for professional investors, as long as you know when to get out or get in. Timing markets are tricky at best if you can control your enthusiasm and disastrous if you are a slave to fear and greed.

When the real estate market peaked in 2005 strategists and the media had already been saying for a year that the bubble was getting ready to burst.  Over the years we've seen many bubbles collapse, the internet bubble, many stock market bubbles (usually followed by a recession or depression), even the credit bubble.

That last one is really the cause of most bubbles. Easy credit combined with over confidence can really cause problems. After most bubbles pop, a credit bubble follows, trailing defaults and bankruptcies.

Let's look at the bubble analogy in a different way. Instead of bubbles let's use waves. When a bubble pops that's it it's over, the end. Waves keep going one after another. So there is always another wave coming toward us, we just have to get past the low point.  If the crest of the wave is too high the wave is unsustainable and crashes.

Waves are really two parts, the crest and the trough, the high and the low.  Think of the crest as greed and the trough as fear. They also represent price.

Warren Buffet the world’s greatest investor has always said "Be greedy when others are fearful and fearful when others are greedy". Which means when others are ruled by fear that is the time to be aggressive. Just like the real estate market today. We're in the trough, people are fearful and the prices are way down. Isn’t that the time to take advantage of this market, when everything is on sale? Another piece of advice is the profit is really made at the time of purchase.

Some are already taking advantage of the market conditions, I see smart investors buying up as much property as they can. But what about the average American? How can we get invested?

Maybe you can't buy real estate right now, but consider REITs (Real Estate Investment Trusts) it’s like a mutual fund for real estate. You can invest with much smaller amounts of capital.  You won't get rich overnight but it’s a solid investment. If you have a 401k hopefully you have one in there. Check mutual fund companies and get a prospectus, just remember a no load fund is best because no load means no commissions.

Yes, real estate is scary right now, and a lot of people have been burned, but they bought when prices where sky high. And now we are looking up at our overpriced mortgages from down in the trough.

No one can guarantee prices will rise to that level again, even experts can only guesstimate. Warren Buffet is very knowledgeable but he is still just a man, just like any other “professional” or “master” they can all make mistakes. They can guesstimate and forecast and ultimately the final decision is ours. Before each decision the last advice they took was their own. So be informed, read books take classes talk to successful people, master your own weaknesses. The only thing we can be certain about is prices will rise and prices will fall. There will be Bubbles and they will pop. Everybody makes mistakes, why waste time beating yourself up?

Investing is a gamble, correct information is our friend, fear and greed can be our masters but can never be trusted. Gambling is scary, don’t ever do it with money you cannot afford to lose and follow the main rule of professional gamblers “You gotta know when to hold them, and know when to fold them”.