Where is the market headed? How should we be investing now?
Many expected the events of 2020 to cause a crash in the housing and finance markets. The opposite seems to be true. At least for now. So, where is it all headed? How do you invest now?
To Infinity & Beyond?
US housing prices and sales volume are breaking new records.
How high can they go? Is this sustainable?
There may be some factors supporting this surge. Especially the rise of tech companies and migration. Panic at fleeting opportunities to buy homes and low interest rates are also certainly fueling current activity.
As long as jobs and wages keep rising in line with this activity, and interest rates don’t spike it can continue.
The Distress is Real
However, virtually no one is reporting on the real distress happening behind the scenes. That in itself should be raising some eyebrows. Whether tens or hundreds of billions of dollars in distressed mortgage notes and REOs hit the market and when may still be uncertain, but they are there in the shadows.
Even if the new white house administration decides to indefinitely suspend most types of evictions and foreclosures, that in itself will have an impact on markets.
It seems to make sense to throttle this activity and let it feed through the pipeline at a moderate pace to avoid crushing asset values and causing panic, but it will have to be addressed and processed at some point within the months ahead.
What to do…
- Ride The Wave: When it is raining gold, put out the bucket and catch as much of it as you can. Don’t miss out on the windfall of gains available.
- Buckle In & Be Prepared: All roller coaster rides start off with a seemingly pleasant climb to the top. You don’t wait to buckle in until after you start dropping off the other side do you? Be sure your finances are positioned to weather any unforeseen twists and turns too.
- Stay Diversified: Don’t bet it all on just one slot on the roulette table. Diversify your investment portfolio to benefit from all scenarios, with consistent returns and solid assets that will protect your wealth in the dips, and soar during the upswings.
The truth is that there are many potential wild cards that could be played in the months ahead. Investors can’t afford to just sit on the sidelines and see what happens. You’ve got to make moves. With the right hybrid approach you can have both a strong defense and offensive game at the same time.
Find out more about investing in secured debt and real estate, go to NNG Capital Fund