Name a financial arrangement/system where current investors’ profits are dependent on cash from new investors.
If you said a Ponzi scheme, you would be correct, but if you said publicly traded stocks, you would also be correct.
Before I explain why stocks are a Ponzi, let me first make a distinction. I’m not saying all stocks are Ponzis, just the ones that perpetually don’t pay dividends. Why? Because there are two ways investors can make money in stocks. One is from dividends, and the other is through capital gains by selling the stock in the future for more than the purchase price.
High Net Worth investors are often ahead of the markets.
Take a page from their playbook and diversify sooner than later to avoid significant losses in the equities and bond markets.
In April of this year, GlobalData published its annual “HNW Asset Allocation Trends 2019” report, a 52-page report geared towards wealth managers with projections and analyses regarding investment allocations of high net worth (“HNW”) investors and how to meet the demands of these investors.
Think you’re too busy to enjoy all the benefits that come with Real Estate Investing?
It’s no secret that the wealthy and institutional investors are heavily invested in commercial real estate.
As an alternative investment, real estate has ideal characteristics as an inflation hedge: yield, leverage, and appreciation. It does well in upwardly trending markets, continues to pay even as you wait out market corrections and typically declines less than stocks in downturns.
“Strongest Recession Signal Yet: Alarm Bells Sound as Key Indicator That Predicted Last Wall Street Crash Goes Negative”
“A possible recession? Treasury yields invert, sounding economic alarm bells.”
“Dow tumbles 800 points in biggest one day fall of year on global economic growth slowdown.”
In the longstanding debate between stocks and real estate, a major point of contention has been liquidity.
Generally speaking, stocks are liquid, real estate is not.
Those on the side of stocks will argue that liquidity enables an investor to be nimble, allowing for flexibility to adjust to changes and risks as well as allowing for capital preservation.