People are clearly having a lot of fun investing and sharing their money moves online this year. Having fun is good. Though it is also an important time to be making smart money moves.
Investing Like it’s 2021
Investing in 2021 is more than the wild west. It seems more like a late night comedy skit or show.
Many are just having fun out there. It’s like since travel to Vegas got shut down everyone is using their play money to have fun online.
Meme currency Dogecoin has rocketed, and Elon Musk recently crashed bitcoin’s value by around 30% with a single tweet.
Then if the buzz isn’t about Gamestop stock going up again, it is SPACs. Special Purpose Acquisition Companies that have blank checks raised from the public to go buy private companies and take them public through what is effectively a backdoor channel.
Around a quarter of all IPOs were believed to be SPAC deals last year. Over 316 SPAC deals have already been done in 2021, to a tune of over $100B. Compare that to one deal in 2009. Whale Wikipedia says that post merger SPAC stock performances are almost always negative.
Huge bubbles appear to be being created and people just don’t seem to care. They are just riding the roller coaster for the fun of it.
What to do with Money you Don’t Want to Gamble with
If you have disposable cash, then absolutely have fun with it.
Though for the money you care about protecting and multiplying, it is clear these are not the things to be spinning the wheel on.
Moreover, many companies seemed to have benefited from the year of the pandemic. Yet they may have trouble keeping that performance up if we are able to get back to normal also.
While the real estate market is up too, and some are certainly grossly overbidding there, it still offers tangible assets with great collateral and downside protection, as well as income potential for those who are taking investing more seriously.
It is perhaps the one asset class which enables investors to enjoy upward runs in bull markets and acts as a hedge against inflation during high growth periods. It also provides safety and cash flow when everything else is evaporating.
Find out more about investing in secured debt and real estate, go to NNG Capital Fund