Notes

Finding The High Ground: Preserving Wealth In Changing Times

Many may be feeling like we are in uncertain and fast changing times. In some senses we may be. In other ways, markets and the economy are performing as predictably as ever.

Great wealth has been created over the past decade. No matter how much you have been able to earn, save, and invest, you don’t want to lose it. So, how do you preserve it?

Predictable Cycles Vs. Evolutionary Change

Social, economic, and financial changes are always happening. Nothing really stays static. However, there is a difference between routine rotations in cycles versus changes that are evolutions which may alter the new normal and future.

The ability to distinguish between these two is critical for not only being able to invest profitably, but to preserve wealth, and avoid lackluster performance which will drag you down over time.

These changes apply to banks, gold, stocks, and even real estate.

There are constant industry and market cycles in action. The boom, bust, recovery, and rebound cycle. While the context varies, we often see this in 7 to 14 year turns.

Then there are macro cycles and changes. Many overlook these and are caught off guard by them. Even if they are predictable based on longer historic data. Think of 200 year cycles.

Then there are feature changes. Some may be fads, others may be new additions to our world. This may range from pandemic quarantines and the need for more space at home to the remote work shift, to Airbnb as an alternative rental strategy, or smart locks and thermostats, solar, and mobile applications.

What’s Different & The Same In Real Estate?

Real estate is still a hard, tangible asset with long term value. It can be flipped and leased for profit.

Single family homes, multifamily income properties, and mortgage loan debt are all a part of this.

Real estate is a great place to store wealth, and to generate passive income and strong yields from. None of that has changed.

Then there are changes in technology, trends, and in demand features. Many of which center around emerging technologies. New software and cloud computing solutions have brought more efficiency to management and operations, as well as improvements in investor engagement.

Then there may be AI technologies which aren’t that smart, and which are destroying some companies and funds without them even realizing it.

In demand property features and trending locations are always changing. As is pricing. Some temporarily, and some more permanently. Where the distress and most supply is versus the most growth is always changing too.

Summary
Preserving wealth can be even more important than high yields. Although, you need competitive returns to preserve wealth as well.

In this respect we can still count on real estate. Traditional strategies still work, though the details may be changing. Some for a moment, and others for the long term. Invest with those that see the difference.


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Article Source: https://nngcapitalfund.com/finding-the-high-ground-preserving-wealth-in-changing-times/