Last month, we covered how seasoned investors had kept on investing through the COVID pandemic and in the run up to the election. During these months the wealthiest added 30% or more to their net worth. This was a time during which notable CEOs like Albert Bourla of Pfizer and Jeff Bezos cashed out of stocks in their own companies, and celebrities like Tommy Hilfiger turned to flipping houses to offset the hit to retail business. Now that the presidential election seems mostly behind us, what should investors be bracing for and looking forward to?
Taxes, Taxes, Taxes
There are dozens of new tax proposals and tax hikes on the table for 2021. For investors it is important to be alert to changes and have flexible tax saving strategies and backups to roll with these punches. Secondly, don’t get so lost in the trees that you can’t see the forest. As always, any new changes are likely to be rolled back and undone by the next white house administration four years from now. That may yield little impact on finances overall in the longer term. Though do remember, that it is what you get to keep and give to others that matters, not the top line revenues you bring in.
Many governors have already begun instituting new lockdowns since the election. It appears these restrictions may not only get tighter in the short term, but may well last through 2021 also. It is tragic for many who have been unprepared, and for those who can’t adapt fast enough to the new world of work and daily life. It’s not what most planned or hoped for, but there are reasons to be optimistic for the time ahead, even if it has been forced instead of voluntary change.
High on Victory or Nursing a Hangover
Given how close the presidential election was, we can guestimate that half of the country is approaching the market from a very bullish perspective. The other half are grappling with a very bearish outlook and the fear of coming changes. This may be the most divided the market has ever been. That’s not necessarily a bad thing, for it may provide a new form of balance. Many should be on a buying spree. Others may be liquidating like crazy. It means both motivated buyers and motivated sellers. These are the perfect conditions for printing money.
Strong End of Year Activity
While the data will lag and won’t show up until sometime deep in Q1 of 2021, you can be sure there will be a lot of activity in mortgage, real estate and investment markets at the end of the year. Between year end bonuses, portfolio restructuring and tax moves, there will be a lot of transactions.
The Best Time to Invest
The best time to invest was probably yesterday. The next best time is today. Despite all of the perceived uncertainty, what we do know is that those who sat on the sidelines in 2020 lost a lot. They at least missed out on one of the best runs to add substantial wealth and passive income to their portfolios. What we can be sure of going into 2021 is that waiting on the fence will only create more loss and missed opportunity. So, how are you going to invest today?
Find out more about investing in secured debt and real estate, go to NNG Capital Fund