There are big shifts happening under the surface out there. It is high time investors rapidly restructure their portfolios, and revisit their asset allocation, if they haven’t already.
While some things have clearly changed in the past few months, the underlying currents and shifts in the tectonic plates of the economy are making some form of major financial earthquake or eruption more likely. Unless of course the economy is flooded with massive amounts of new stimulus to stave off the impacts of recent monetary policy.
A Downturn Unlike Any Other
This is what the world’s largest asset manager is forecasting according to a recent report by Yahoo.
Some believe that we’ve already pulled out of a recession. Blackrock on the other hand states that central banks are deliberately forcing recessions, and are attempting to throw us into the abyss, with no expectations of big bailouts this time around.
There are many factors which could negate and turn this around. Especially with another presidential election campaign about to kick off.
However, it is worth watching the data and staying ahead of the curve.
Crypto has already gone from winter to an ice age that will take massive change to thaw out.
Fads and luxury gambles like NFTs aren’t likely to attract as much attention and capital if the economy does tighten up.
If Blackrock is right, and stocks nosedive, then we might also expect trouble for municipal bonds, and private tech startups relying on more capital.
7x Your Investment Performance With This
The same report from Yahoo states that the data shows the 10 periods in which the Federal Funds Rate was raised between 1978 and 2021. All resulted in private real estate investment outperforming stocks and bonds by seven times.
Some may hide some emergency cash in gold or certificates of deposit. Yet, high inflation means that investors must also be striving for positive gains to avoid net losses.
Restructuring Your Investment Portfolio
The ideal portfolio mix may be different for each individual investor, their own timeline and needs. However the above certainly seems to be a big wake up call for a hard review and some adjustments.
For this next phase of the economy, asset protection, inflation beating returns, and passive income will all be vital. Real estate definitely has the track record of performing on all of those fronts.
It may be time for many to dramatically decrease exposure to stocks and bonds, put a little more into cash equivalents, and ensure that the bulk of their portfolios are in real estate for this part of the cycle.