Similar to polling that favored Hillary Clinton’s likely election, many bankers’ gloom and doom forecasts of an equity market meltdown turned out to be incredibly inaccurate. JPMorgan and Citi predicted 3 percent to 5 percent declines in the stock market, and futures trading pointed in that direction briefly. However, all of the equity markets were trading higher relatively early in the session. Investors rely on these experts to manage their hard-earned money, and a big miss like this will leave some rethinking who they trust to manage their capital.
Disenfranchised investors have other paths to wealth protection.
In fact, President-elect Donald Trump did not become a billionaire in the stock market. He leveraged real estate to build wealth. While the commercial market gains he has achieved may be out of reach for many, the single-family rental market is open to more investors than before. Big data that helps investors analyze distant markets and experienced, professional management firms have broken down the geographic boundaries that once defined the asset class. Entry costs can be prohibitive, but low borrowing rates can help investors amplify returns and create geographically diverse portfolios. When the brightest minds on Wall Street predict blood in the streets, potentially encouraging investors to make rash, harmful decisions with their nest eggs, it’s time to reconsider allocations.
Real Estate Can Insulate Investors from Speculation
The biggest advantage to investing in the SFR market is the supply and demand balance. These factors favor strong performance for the next several years, while the market is driven by actual performance rather than speculation. Additionally, SFR assets continue to pay dividends from rent during all economic cycles and recovered stronger than ever after the downturn during the middle of the last decade. Real estate is a hard asset, and rarely succumbs to value fluctuations caused by events such as Tuesday’s presidential election or the United Kingdom’s vote to leave the EU. After the second disastrous prediction in the past six months, investors may want to re-examine where they place their trust, and their hard-earned investment dollars.