{"id":181183,"date":"2025-02-21T12:00:27","date_gmt":"2025-02-21T19:00:27","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=181183"},"modified":"2025-02-21T12:02:51","modified_gmt":"2025-02-21T19:02:51","slug":"is-there-irrational-exuberance-in-2025-macro-environment","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/is-there-irrational-exuberance-in-2025-macro-environment","title":{"rendered":"My 2025 Macro Observations: Irrational Exuberance 3.0?"},"content":{"rendered":"\n<p><span data-preserver-spaces=\"true\">If the last two years in financial markets were a movie, they\u2019d be a mix of <\/span><em><span data-preserver-spaces=\"true\">The Wolf of Wall Street<\/span><\/em><span data-preserver-spaces=\"true\"> (euphoria), <\/span><em><span data-preserver-spaces=\"true\">Final Destination<\/span><\/em><span data-preserver-spaces=\"true\"> (impending doom), and <\/span><em><span data-preserver-spaces=\"true\">Groundhog Day<\/span><\/em><span data-preserver-spaces=\"true\"> (rates are still high, but stocks keep going up?!). Investors have enjoyed substantial gains in stocks, Bitcoin, and gold. Yet the <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.cnn.com\/markets\/fear-and-greed\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">fear and greed index<\/span><\/a><span data-preserver-spaces=\"true\"> says that investors are \u201cfearful.\u201d&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">I believe rising Treasury yields, sticky inflation, and a cocktail of economic and political risks make 2025 a year when caution should be the default setting<\/span><span data-preserver-spaces=\"true\">, and I<\/span><span data-preserver-spaces=\"true\"> am repositioning my portfolio accordingly.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Market Performance: The Good, the Bad, and the Overpriced<\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">The money supply: M2<\/span><\/h3>\n\n\n\n<p><span data-preserver-spaces=\"true\">Yes, it surged from 2019-2022, driving inflation and asset prices THEN.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">However, <\/span><span data-preserver-spaces=\"true\">I think<\/span><span data-preserver-spaces=\"true\"> it\u2019s foolish oversimplification (and likely wrong) to attribute asset price growth from 2023-2025 to a general increase in the money supply NOW.<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong><span data-preserver-spaces=\"true\">January 2023 M2:<\/span><\/strong><span data-preserver-spaces=\"true\"> $21,187 ($ billions of dollars)<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">January 2025 M2: <\/span><\/strong><span data-preserver-spaces=\"true\">$21,533\u00a0<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Change: <\/span><\/strong><span data-preserver-spaces=\"true\">+1.6%<\/span><\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1333\" height=\"557\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2025\/02\/image1-1.jpeg\" alt=\"st. louis federal reserve chart\" class=\"wp-image-181186\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2025\/02\/image1-1.jpeg 1333w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2025\/02\/image1-1-300x125.jpeg 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2025\/02\/image1-1-1024x428.jpeg 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2025\/02\/image1-1-768x321.jpeg 768w\" sizes=\"auto, (max-width: 1333px) 100vw, 1333px\" \/><figcaption class=\"wp-element-caption\"><br \/><em>M2- <a href=\"http:\/\/St. Louis Federal Reserve -\" target=\"_blank\">St. Louis Federal Reserve<\/a><\/em><\/figcaption><\/figure>\n\n\n\n<p><span data-preserver-spaces=\"true\">M2 is a proxy for the money supply that attempts to measure most short-term liquidity positions, including money in bank accounts, currency, and other liquid deposits, like money market accounts.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Contrary to the party line of a large horde of fiat critics <\/span><span data-preserver-spaces=\"true\">out there<\/span><span data-preserver-spaces=\"true\">, the money supply is not increasing <\/span><span data-preserver-spaces=\"true\">at a faster rate<\/span><span data-preserver-spaces=\"true\"> than asset values or inflation in the last two years.<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">There is no doubt in my mind<\/span><span data-preserver-spaces=\"true\"> that the<\/span><span data-preserver-spaces=\"true\"> 39% increase in the money supply from 2019 to 2022 was a major driver of inflation and the surge in asset prices.<\/span> <span data-preserver-spaces=\"true\">I am skeptical<\/span><span data-preserver-spaces=\"true\">, however,<\/span><span data-preserver-spaces=\"true\"> that inflation since 2023, for both the CPI and asset values, has <\/span><span data-preserver-spaces=\"true\">been primarily a result of<\/span><span data-preserver-spaces=\"true\"> an increase in the money supply.<\/span><span data-preserver-spaces=\"true\"> From 2023 onwards, I believe <\/span><span data-preserver-spaces=\"true\">that other<\/span><span data-preserver-spaces=\"true\"> factors have been at play\u2014like the long-term trend of baby boomers leaving the workforce, resulting in wage growth.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">In 2025, <\/span><span data-preserver-spaces=\"true\">I believe that<\/span><span data-preserver-spaces=\"true\"> the story will shift, at least in Q1 and Q2.<\/span><span data-preserver-spaces=\"true\"> Prices are increasing because of something other than the money supply right now. Investors should take that seriously.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">\u201cThe government keeps printing money\u201d is\/was a great sound bite\/diagnosis for price increases when you are the 900th comment on a pro-Bitcoin Reddit thread. And it was a correct observation and a real reason to believe in <\/span><span data-preserver-spaces=\"true\">major<\/span><span data-preserver-spaces=\"true\"> inflation from 2020 through 2022.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">But that surge in the money supply<\/span><span data-preserver-spaces=\"true\">, I believe,<\/span><span data-preserver-spaces=\"true\"> has already been <\/span><span data-preserver-spaces=\"true\">largely<\/span><span data-preserver-spaces=\"true\"> absorbed into the economy and was reflected in the prices of goods, services, <\/span><span data-preserver-spaces=\"true\">many<\/span><span data-preserver-spaces=\"true\"> wages, real estate, and stocks by the middle of 2022.<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/p>\n\n\n\n<p><em><span data-preserver-spaces=\"true\">I\u2019d be careful as an investor\u2014dollars in savings accounts may not degrade in real value over the next five years at anywhere close to the rate they did from 2019-2022.&nbsp;<\/span><\/em><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">S&amp;P 500:<\/span><span data-preserver-spaces=\"true\"> U.S. stocks <\/span><span data-preserver-spaces=\"true\">are priced<\/span><span data-preserver-spaces=\"true\"> for a golden age, where everything goes perfectly according to plan for the biggest companies in the world.<\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong><span data-preserver-spaces=\"true\">January 2023:<\/span><\/strong><span data-preserver-spaces=\"true\"> 3,999<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">January 2025:<\/span><\/strong><span data-preserver-spaces=\"true\"> 6,040<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Change:<\/span><\/strong><span data-preserver-spaces=\"true\"> +51%<\/span><\/li>\n<\/ul>\n\n\n\n<p><span data-preserver-spaces=\"true\">The S&amp;P is as expensive as <\/span><span data-preserver-spaces=\"true\">it\u2019s ever been<\/span><span data-preserver-spaces=\"true\">, relative to earnings, aside from 1999\/2000. With the Shiller P\/E ratio at 38.5X, the only other time it\u2019s been this expensive relative to trailing 10-year earnings was in 1999. It\u2019s risen 2.35X in six years, from 2,600 in January 2019.&nbsp;<\/span><\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"869\" height=\"411\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2025\/02\/image3-1.jpeg\" alt=\"\" class=\"wp-image-181188\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2025\/02\/image3-1.jpeg 869w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2025\/02\/image3-1-300x142.jpeg 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2025\/02\/image3-1-768x363.jpeg 768w\" sizes=\"auto, (max-width: 869px) 100vw, 869px\" \/><figcaption class=\"wp-element-caption\"><a href=\"https:\/\/www.multpl.com\/shiller-pe\" target=\"_blank\" rel=\"noopener\"><em>Shiller Price-to-Earnings Ratio<\/em><\/a><\/figcaption><\/figure>\n\n\n\n<p><span data-preserver-spaces=\"true\">This time is different, right?<\/span> <span data-preserver-spaces=\"true\">Artificial intelligence (AI), American hegemony, globalization, inflation, deregulation with a new \u201cpro-business\u201d administration, strong earnings growth, etc., will all drive an unprecedented wave of corporate profits, right?<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">If you <\/span><span data-preserver-spaces=\"true\">are invested<\/span><span data-preserver-spaces=\"true\"> in the S&amp;P 500, that\u2019s the bet. I don\u2019t like that bet.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">I believe <\/span><span data-preserver-spaces=\"true\">that<\/span><span data-preserver-spaces=\"true\"> this is the riskiest stock market since 1999, and <\/span><span data-preserver-spaces=\"true\">a lot of<\/span><span data-preserver-spaces=\"true\"> people who buy into the \u201cthe stock market always goes up in the long run\u201d argument could be hurt badly.<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Therefore, I am reallocating away from stocks to bonds and real estate.<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Bitcoin: Same price-to-earnings ratio, different price<\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong><span data-preserver-spaces=\"true\">January 2023:<\/span><\/strong><span data-preserver-spaces=\"true\"> $17,000<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">January 2025: <\/span><\/strong><span data-preserver-spaces=\"true\">$96,000<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Change: <\/span><\/strong><span data-preserver-spaces=\"true\">+465%<\/span><\/li>\n<\/ul>\n\n\n\n<p><span data-preserver-spaces=\"true\">Remember when Bitcoin was &#8220;dead&#8221; in 2022? Well, <\/span><span data-preserver-spaces=\"true\">turns<\/span><span data-preserver-spaces=\"true\"> out it was just taking a power nap. BTC is back with a vengeance, <\/span><span data-preserver-spaces=\"true\">largely fueled<\/span><span data-preserver-spaces=\"true\"> by institutional adoption, ETF approvals, and the ongoing distrust in traditional fiat currencies. <\/span><span data-preserver-spaces=\"true\">That being said,<\/span><span data-preserver-spaces=\"true\"> with this level of parabolic growth, any major shock (say, a regulatory crackdown) could lead to an ugly unwind.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">I believe that, per my observation about the money supply, Bitcoin\u2019s price surge from 2023 to 2025 is not a result of the dollar losing value but rather <\/span><span data-preserver-spaces=\"true\">the result of<\/span><span data-preserver-spaces=\"true\"> a surge in speculative demand.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">I am <\/span><span data-preserver-spaces=\"true\">extremely<\/span><span data-preserver-spaces=\"true\"> unpopular and seemingly <\/span><span data-preserver-spaces=\"true\">nearly<\/span><span data-preserver-spaces=\"true\"> alone with this take<\/span><span data-preserver-spaces=\"true\">, but I<\/span><span data-preserver-spaces=\"true\"> worry that in the event of a recession or market crash that requires people to begin harvesting portions of their portfolios, Bitcoin can and will get hit first and hardest.<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">This<\/span><span data-preserver-spaces=\"true\"> is an \u201casset\u201d that is still, in my view, at risk of total loss at any time. <\/span><span data-preserver-spaces=\"true\">Growth in price<\/span><span data-preserver-spaces=\"true\"> is not a sign of worldwide adoption, but of ever-increasing, geometrically compounding risk.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">I own no Bitcoin. To head off the Bitcoin people who will immediately chime in and tell me how I am missing out on an asset that would \u201cmake my bloodline\u201d (actual comment from Bitcoin Bro) and what an expensive position they think I hold, here is a rendering of me in 10 years, per ChatGPT, after missing out on Bitcoin\u2019s takeover:<\/span><\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"1024\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2025\/02\/image2-1.jpeg\" alt=\"bitcoin bros laughing at Scott\" class=\"wp-image-181187\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2025\/02\/image2-1.jpeg 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2025\/02\/image2-1-300x300.jpeg 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2025\/02\/image2-1-150x150.jpeg 150w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2025\/02\/image2-1-768x768.jpeg 768w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2025\/02\/image2-1-200x200.jpeg 200w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Gold: Slow and steady, store of value\u2014except it\u2019s rising in price almost as fast as the S&amp;P 500<\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong><span data-preserver-spaces=\"true\">January 2023:<\/span><\/strong><span data-preserver-spaces=\"true\"> $1,850\/oz<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">January 2025: <\/span><\/strong><span data-preserver-spaces=\"true\">$2,650\/oz<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Change: <\/span><\/strong><span data-preserver-spaces=\"true\">+43%<\/span><\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"751\" height=\"536\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2025\/02\/image5.jpeg\" alt=\"gold futures\" class=\"wp-image-181190\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2025\/02\/image5.jpeg 751w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2025\/02\/image5-300x214.jpeg 300w\" sizes=\"auto, (max-width: 751px) 100vw, 751px\" \/><figcaption class=\"wp-element-caption\"><em>Gold Futures<\/em><\/figcaption><\/figure>\n\n\n\n<p><span data-preserver-spaces=\"true\">In January 2019, gold traded at $1,285\/ounce. That\u2019s a 2.2X increase against a 40% increase in the money supply. Gold&#8217;s rise in an era of high interest rates is like a tortoise winning the race\u2014it\u2019s slow but inevitable. Or at least, this is why investors, speculators, or the scared tend to flee to gold.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">But what is gold when its value accretes almost as fast as the S&amp;P 500 during a historic bull run? Is it <\/span><span data-preserver-spaces=\"true\">really<\/span><span data-preserver-spaces=\"true\"> a <\/span><span data-preserver-spaces=\"true\">safe<\/span><span data-preserver-spaces=\"true\"> haven and hedge against inflation?<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Given gold\u2019s price run-up, I wonder if people are paying for security or just FOMO. I own no gold.<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Residential real estate: The forgotten stepchild<\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong><span data-preserver-spaces=\"true\">January 2023 Case-Shiller National Home Price Index:<\/span><\/strong><span data-preserver-spaces=\"true\"> 298<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">January 2025: <\/span><\/strong><span data-preserver-spaces=\"true\">314<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Change: <\/span><\/strong><span data-preserver-spaces=\"true\">+5.3%<\/span><\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1349\" height=\"556\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2025\/02\/image4.jpeg\" alt=\"S&amp;P CoreLogic Case-Shiller U.S. National Home Price Index- St. Louis Federal Reserve\" class=\"wp-image-181189\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2025\/02\/image4.jpeg 1349w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2025\/02\/image4-300x124.jpeg 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2025\/02\/image4-1024x422.jpeg 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2025\/02\/image4-768x317.jpeg 768w\" sizes=\"auto, (max-width: 1349px) 100vw, 1349px\" \/><figcaption class=\"wp-element-caption\"><em>S&amp;P CoreLogic Case-Shiller U.S. National Home Price Index- St. Louis Federal Reserve<\/em><\/figcaption><\/figure>\n\n\n\n<p><span data-preserver-spaces=\"true\">Unlike stocks and Bitcoin, real estate has been the designated driver at this financial party. High mortgage rates have kept housing prices from surging, and while single-family homes have held up better, commercial real estate (CRE) has been a different story.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Back in January 2019, the Case-Shiller index traded at 204. <\/span><span data-preserver-spaces=\"true\">Or<\/span><span data-preserver-spaces=\"true\"> put differently, housing prices have risen 53% in six years. Without leverage, this asset class has been one of the worst performers of the last five to seven years, and housing\u2014single-family homes, specifically\u2014has been the best-performing part of the real estate ecosystem, with asset values getting crushed from 2022 to the present in many commercial real estate sectors.&nbsp;<\/span><\/p>\n\n\n\n<p><em><span data-preserver-spaces=\"true\">Residential real estate has seen price and rent growth only marginally outpace growth in the money supply in the last few years. <\/span><span data-preserver-spaces=\"true\">I believe it<\/span><span data-preserver-spaces=\"true\"> is at a much lower risk than other asset classes in 2025.<\/span><span data-preserver-spaces=\"true\"> Therefore, I am conservatively buying real estate with funds reallocated from stock holdings.<\/span><\/em><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Commercial real estate: Deep, soul-crushing, generational wealth-destroying, and possibly career-ending pain for investors over the past six years<\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong><span data-preserver-spaces=\"true\">January 2023 Green Street Commercial Property Price Index: <\/span><\/strong><span data-preserver-spaces=\"true\">154<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">January 2025: <\/span><\/strong><span data-preserver-spaces=\"true\">127<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Change: <\/span><\/strong><span data-preserver-spaces=\"true\">-18%<\/span><\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"981\" height=\"549\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2025\/02\/image7.jpeg\" alt=\"Green Street Commercial Property Price Index\" class=\"wp-image-181192\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2025\/02\/image7.jpeg 981w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2025\/02\/image7-300x168.jpeg 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2025\/02\/image7-768x430.jpeg 768w\" sizes=\"auto, (max-width: 981px) 100vw, 981px\" \/><figcaption class=\"wp-element-caption\"><em><a href=\"https:\/\/www.greenstreet.com\/insights\/CPPI\" target=\"_blank\" rel=\"noreferrer noopener\">Green Street Commercial Property Price Index<\/a><\/em><\/figcaption><\/figure>\n\n\n\n<p><span data-preserver-spaces=\"true\">This<\/span> <span data-preserver-spaces=\"true\">is ugly. And it\u2019s not like CRE investors who got in at 2019 price levels enjoyed a high enough run-up to still be sitting pretty on large gains in 2025. In six years, commercial real estate has lost 4% of its value, led by deep pain in the office sector from 2019 to the present and deep pain in multifamily from 2022 to the present.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">When we consider how commercial real estate is one of the most highly leveraged asset classes out there, an 18% decline can mean equity losses of 40% to 60% for investors.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">2025 is shaping up to be the year the chickens come home to roost in multifamily: The supply onslaught continues, there seems to be no end in sight to falling interest rates, demand is not high enough to drive meaningful rent growth, operating expenses continue to rise, and a material percentage of the debt backing these assets matures, forcing horrible refinance or sale decisions.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">I\u2019ve been <\/span><span data-preserver-spaces=\"true\">talking about<\/span><span data-preserver-spaces=\"true\"> the risks in multifamily specifically for years, with great detail on the risks for 2023 and 2024 spelled out <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/multifamily-real-estate-is-on-the-brink-of-crashing\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">here<\/span><\/a><span data-preserver-spaces=\"true\"> and <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/multifamily-crash-to-continue-through-2024\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">here<\/span><\/a><span data-preserver-spaces=\"true\">.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">I believe that<\/span><span data-preserver-spaces=\"true\"> commercial<\/span><span data-preserver-spaces=\"true\"> real estate is at, or nearing, the bottom of a historically bad cycle.<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">I am watching the CRE market <\/span><span data-preserver-spaces=\"true\">extremely<\/span><span data-preserver-spaces=\"true\"> closely, and believe there is <\/span><span data-preserver-spaces=\"true\">a real<\/span><span data-preserver-spaces=\"true\"> probability of \u201cno-brainers in 2H 2025.\u201d My \u201cresidential\u201d investment was <\/span><span data-preserver-spaces=\"true\">actually<\/span><span data-preserver-spaces=\"true\"> a quadplex, which is in between a \u201ccommercial\u201d and \u201cresidential\u201d property.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">As I study the market more, <\/span><span data-preserver-spaces=\"true\">I think<\/span><span data-preserver-spaces=\"true\"> there is a reasonable probability that I buy a lot of CRE in the next two years.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">The Two Areas of Commercial Real Estate I\u2019m Most Curious About<\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">1. Multifamily is likely at or close to the bottom in many regions<\/span><\/h3>\n\n\n\n<p><span data-preserver-spaces=\"true\">If it\u2019s not already \u201cbuy time\u201d in multifamily\/apartments, it will be by 2H 2025<\/span><span data-preserver-spaces=\"true\">, <\/span><span data-preserver-spaces=\"true\">or <\/span><span data-preserver-spaces=\"true\">certainly<\/span><span data-preserver-spaces=\"true\"> 1H 2026.<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Whatever we have been waiting for in terms of a buying opportunity in multifamily <\/span><span data-preserver-spaces=\"true\">is likely to<\/span><span data-preserver-spaces=\"true\"> be here right now or months, not years, away. I\u2019ve never seen a bid\/ask spread as high in my career, and I think that <\/span><span data-preserver-spaces=\"true\">a lot of<\/span><span data-preserver-spaces=\"true\"> influencers-turned-syndicators who bought at the peak from 2021-2022 will <\/span><span data-preserver-spaces=\"true\">be forced<\/span><span data-preserver-spaces=\"true\"> to realize massive losses this year and next.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Their pain is the conservative investor\u2019s gain. I think that in five years, few who buy in 1H 2025 will feel like they <\/span><span data-preserver-spaces=\"true\">bought<\/span><span data-preserver-spaces=\"true\"> anywhere close to the top, and it\u2019s <\/span><span data-preserver-spaces=\"true\">very<\/span><span data-preserver-spaces=\"true\"> possible that right now is the bottom for this asset class. I am starting to buy now, conservatively, with light or no leverage, and will likely continue to buy, adding leverage if things get worse and worse.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">I love Denver and think the pressure on sellers is very real here <\/span><span data-preserver-spaces=\"true\">right now<\/span><span data-preserver-spaces=\"true\">, but <\/span><span data-preserver-spaces=\"true\">I <\/span><span data-preserver-spaces=\"true\">think<\/span><span data-preserver-spaces=\"true\"> that<\/span><span data-preserver-spaces=\"true\"> markets like Austin, Texas, and most major Florida markets are likely to be some of the best values in the country.<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">2. Office space: Is it currently priced for the apocalypse?&nbsp;<\/span><\/h3>\n\n\n\n<p><span data-preserver-spaces=\"true\">I recently talked to an investor who bought a 12-cap office building with a current occupancy of 72%, seller-financed at 70% LTV for five years with interest-only debt, at a 40% lower valuation than its last sale in 2013. Either he exits that thing at an eight-cap in five years, with 90%+ occupancy, or South Denver dies as we know it.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Is office so beaten-down and depressed as an asset class that buying an office building has become an \u201cEither people come back to work here in the next three to seven years, or this part of the city will decay and turn to dust\u201d bet?&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">You can bet<\/span><span data-preserver-spaces=\"true\"> I will become a student of the office market in 2025, in the same way<\/span><span data-preserver-spaces=\"true\">, that<\/span><span data-preserver-spaces=\"true\"> I have attempted to become a student of single-family and multifamily these past 10 years.<\/span> <span data-preserver-spaces=\"true\">I am currently a novice in understanding office real estate, so I <\/span><span data-preserver-spaces=\"true\">merely<\/span> <span data-preserver-spaces=\"true\">pose the question of<\/span><span data-preserver-spaces=\"true\"> whether this is the right time.<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">10-Year Treasury Yield: Rising Like a Persistent Villain<\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong><span data-preserver-spaces=\"true\">January 2023: <\/span><\/strong><span data-preserver-spaces=\"true\">3.5%<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">January 2025: <\/span><\/strong><span data-preserver-spaces=\"true\">4.9%<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Change:<\/span><\/strong><span data-preserver-spaces=\"true\"> +40%<\/span><\/li>\n<\/ul>\n\n\n\n<p><span data-preserver-spaces=\"true\">Bond yields have continued their steady climb, leaving anyone hoping for a Fed pivot sorely disappointed. Higher yields mean borrowing costs remain elevated, which should put downward pressure on everything from stocks to home prices.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Again, higher Treasury yields should put downward pressure on everything from stocks to home prices. They haven\u2019t had this effect in the last two years, outside residential real estate, which has seen little to no growth <\/span><span data-preserver-spaces=\"true\">in the last<\/span><span data-preserver-spaces=\"true\"> two years, and commercial real estate, which has crashed.&nbsp;&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Bonds: No Respect From a Generation of Investors Who Haven\u2019t Experienced a Downturn&nbsp;&nbsp;<\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong><span data-preserver-spaces=\"true\">January 2023 Vanguard Total Bond Market ETF (VBTLX) Price:<\/span><\/strong><span data-preserver-spaces=\"true\"> $9.66<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">January 2025 VBTLX Price:<\/span><\/strong><span data-preserver-spaces=\"true\"> $9.55<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Change: <\/span><\/strong><span data-preserver-spaces=\"true\">-1%<\/span><\/li>\n<\/ul>\n\n\n\n<p><span data-preserver-spaces=\"true\">As interest rates rise, bond equity values fall. Interest rates fell nearly continuously from 1982 to 2022:\u00a0<\/span><\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"935\" height=\"499\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2025\/02\/image6.jpeg\" alt=\"Long-Term Interest Rates (1926-2022)\" class=\"wp-image-181191\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2025\/02\/image6.jpeg 935w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2025\/02\/image6-300x160.jpeg 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2025\/02\/image6-768x410.jpeg 768w\" sizes=\"auto, (max-width: 935px) 100vw, 935px\" \/><figcaption class=\"wp-element-caption\"><em>Long-Term Interest Rates (1926-2022)<\/em><\/figcaption><\/figure>\n\n\n\n<p><span data-preserver-spaces=\"true\">Bonds do very well in that kind of environment and, better, also serve their intended purpose as a hedge against a market downturn\u2014in the event the market crashes or there is a deep recession or depression, investors can expect the Federal Reserve to lower interest rates, which props up bond equity values for investors.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">In recent years, many investors, at least those who frequent BiggerPockets, <\/span><span data-preserver-spaces=\"true\">seem to be<\/span><span data-preserver-spaces=\"true\"> exiting bonds.<\/span><span data-preserver-spaces=\"true\"> It makes sense on the surface. Bond yields are still too low (VBTLX currently offers a measly 4.6% yield to maturity and even less in income\u2014a <\/span><span data-preserver-spaces=\"true\">smart<\/span><span data-preserver-spaces=\"true\"> shopper can get 3.8% to 4.2% on a <\/span><span data-preserver-spaces=\"true\">good<\/span><span data-preserver-spaces=\"true\"> savings or money market account with a lower risk of principal loss and <\/span><span data-preserver-spaces=\"true\">extremely<\/span><span data-preserver-spaces=\"true\"> high liquidity) to <\/span><span data-preserver-spaces=\"true\">really<\/span><span data-preserver-spaces=\"true\"> make sense.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">But good times make investors forget that these bonds <\/span><span data-preserver-spaces=\"true\">are what<\/span><span data-preserver-spaces=\"true\"> can save a portfolio, including a traditional or early retirement, in the event of a severe downturn. Falling rates result in equity gains for bonds, and a downturn is highly likely to coincide with quick rate drops from the Fed.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">I am considering, but have not yet done so, moving my retirement account positions to be in the 60\/40 or 50\/50 stocks\/bonds <\/span><span data-preserver-spaces=\"true\">allocation<\/span><span data-preserver-spaces=\"true\">.<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">What Am I Doing in Response to All This?<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">In an environment where markets are frothy, risk is high, and uncertainty is everywhere, I believe the logical investor response includes:<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Trimming stock exposure + rebalancing\/reallocating<\/span><\/h3>\n\n\n\n<p><span data-preserver-spaces=\"true\">With stocks at near-all-time high price-to-earnings ratios, <\/span><span data-preserver-spaces=\"true\">I felt <\/span><span data-preserver-spaces=\"true\">that<\/span><span data-preserver-spaces=\"true\"> the<\/span><span data-preserver-spaces=\"true\"> prudent move was to reset my portfolio.<\/span><span data-preserver-spaces=\"true\"> I rebalanced and moved a <\/span><span data-preserver-spaces=\"true\">huge<\/span><span data-preserver-spaces=\"true\"> portion of my stock portfolio to lightly levered real estate in Q1 2025.<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Holding more cash<\/span><\/h3>\n\n\n\n<p><span data-preserver-spaces=\"true\">A hefty cash position provides dry powder for when the inevitable pullback arrives. <\/span><span data-preserver-spaces=\"true\">I always maintain a larger-than-usual cash position because <\/span><span data-preserver-spaces=\"true\">I feel<\/span><span data-preserver-spaces=\"true\"> it would be highly embarrassing to declare personal bankruptcy after writing a book called <\/span><em><span data-preserver-spaces=\"true\">Set for Life<\/span><\/em><span data-preserver-spaces=\"true\">.<\/span><span data-preserver-spaces=\"true\"> So, no real change here.<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Investing in debt + bonds<\/span><\/h3>\n\n\n\n<p><span data-preserver-spaces=\"true\">With Treasury yields approaching 5%, bonds and real estate-backed loans offer compelling risk-adjusted returns. In addition to potentially rebalancing some of my portfolio to a 60\/40 or 50\/50 stocks\/bonds position, I will likely add a hard money loan or two back to my portfolio this year if I don\u2019t buy more real estate outright. As a semiprofessional real estate investor, <\/span><span data-preserver-spaces=\"true\">I feel that<\/span><span data-preserver-spaces=\"true\"> my ability to foreclose on real property <\/span><span data-preserver-spaces=\"true\">greatly<\/span><span data-preserver-spaces=\"true\"> reduces my risk on private loans in the category.&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Buying residential real estate<\/span><\/h3>\n\n\n\n<p><strong><span data-preserver-spaces=\"true\">Lightly levered, or <\/span><span data-preserver-spaces=\"true\">completely<\/span><span data-preserver-spaces=\"true\"> paid off:<\/span><\/strong><span data-preserver-spaces=\"true\"> High rates mean borrowing is expensive. If you\u2019re buying real estate, paying cash (or at least limiting leverage) can help mitigate risk. The cap rate on my most recent purchase is <\/span><span data-preserver-spaces=\"true\">extremely<\/span><span data-preserver-spaces=\"true\"> close, after tax, to the yield I can get on a short-duration hard money note. If I can yield ~10% (7% cap rate + 3% appreciation on average) on an asset that should see price and rent growth, hold pace with or grow in value faster than inflation without using any debt <\/span><span data-preserver-spaces=\"true\">at all<\/span><span data-preserver-spaces=\"true\">, why bother overthinking it?)<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Studying and training myself to spot \u201cno-brainers\u201d in commercial real estate, specifically multifamily and office<\/span><\/h3>\n\n\n\n<p><span data-preserver-spaces=\"true\">I think there is a reasonable probability that an incredible buyer\u2019s market is here, right now, in <\/span><span data-preserver-spaces=\"true\">office<\/span><span data-preserver-spaces=\"true\">, and just around the corner, in multifamily. I don\u2019t know what I\u2019m doing in <\/span><span data-preserver-spaces=\"true\">office<\/span><span data-preserver-spaces=\"true\">. That will change. I intend to study, maintain access to liquidity, and be ready to enter this space with a meaningful part of my portfolio in the next 18 months.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">On Taxes and the Realization of Gains&nbsp;<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">I frequently hear investors argue that making moves like those I list is incredibly tax-inefficient\u2014or at least they observe that I will pay taxes. A <\/span><span data-preserver-spaces=\"true\">major<\/span><span data-preserver-spaces=\"true\"> portfolio reallocation can <\/span><span data-preserver-spaces=\"true\">absolutely<\/span><span data-preserver-spaces=\"true\"> create tax drag.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">I have a unique <\/span><span data-preserver-spaces=\"true\">perspective on taxes<\/span><span data-preserver-spaces=\"true\"> that <\/span><span data-preserver-spaces=\"true\">I think<\/span><span data-preserver-spaces=\"true\"> is worth mentioning, as it informs my decision-making.<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">First, I optimize for post-tax net worth, <\/span><span data-preserver-spaces=\"true\">usable<\/span><span data-preserver-spaces=\"true\"> in my life today<\/span><span data-preserver-spaces=\"true\">, right now<\/span><span data-preserver-spaces=\"true\">, not pre-tax net worth at traditional retirement age or time of death.<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">I am 34 years old. Maximizing the value of my estate to pass on incrementally more wealth to my heirs some 50 years down the road is meaningless. Unless I do something <\/span><span data-preserver-spaces=\"true\">extremely risky<\/span><span data-preserver-spaces=\"true\">, and blow everything, there should be plenty for my heirs later in life.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">My two-year-old daughter is not <\/span><span data-preserver-spaces=\"true\">thinking about<\/span><span data-preserver-spaces=\"true\"> an extra million dollars when she is 55. She is thinking about playing hide-and-seek with me today. The opportunity cost of traditional tax minimization advice that could lead to me not having cash flow or liquidity to optimize time with her right now will cost me much more than <\/span><span data-preserver-spaces=\"true\">even<\/span><span data-preserver-spaces=\"true\"> a several hundred-thousand-dollar tax hit.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">My wealth, my true wealth, is the after-tax liquidity my portfolio can generate for me today. Not a number with eight figures on it 30 years from now in my spreadsheet.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Second, I am willing to bet that capital gains taxes will go up <\/span><span data-preserver-spaces=\"true\">in the future<\/span><span data-preserver-spaces=\"true\">. <\/span><span data-preserver-spaces=\"true\">While it is more efficient to <\/span><span data-preserver-spaces=\"true\">simply<\/span><span data-preserver-spaces=\"true\"> allow wealth to compound in perpetuity tax efficiently, never harvesting gains, there is every chance that the marginal tax rates for capital gains will increase <\/span><span data-preserver-spaces=\"true\">in the future<\/span><span data-preserver-spaces=\"true\">.<\/span> <span data-preserver-spaces=\"true\">In fact,<\/span><span data-preserver-spaces=\"true\"> I will (and in some ways, already am) bet(ting) on it. <\/span><span data-preserver-spaces=\"true\">This<\/span><span data-preserver-spaces=\"true\"> lessens the wealth consequences of paying taxes on gains now.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">There is also the real, though remote, possibility that tax brackets for capital gains increase so much over my lifetime that I am <\/span><span data-preserver-spaces=\"true\">actually<\/span><span data-preserver-spaces=\"true\"> ahead by paying taxes at today\u2019s rates rather than those of the 2055s.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Third, I only realize gains when I have personal use for the proceeds or I am reallocating dollars.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">If I believe <\/span><span data-preserver-spaces=\"true\">that I<\/span><span data-preserver-spaces=\"true\"> will incur less risk or have a shot at better returns, the tax consequences are much lower. <\/span><span data-preserver-spaces=\"true\">I <\/span><span data-preserver-spaces=\"true\">believe<\/span><span data-preserver-spaces=\"true\"> that the moves I make<\/span><span data-preserver-spaces=\"true\">, when I make them infrequently and realize gains,<\/span><span data-preserver-spaces=\"true\"> are likely to provide much more upside, or much less risk, than keeping assets in place; otherwise, I won\u2019t make them.<\/span><span data-preserver-spaces=\"true\">&nbsp;&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">If I\u2019m right, the tax drag is a nonfactor. If I\u2019m wrong, I\u2019ll see a double hit (tax drag <\/span><em><span data-preserver-spaces=\"true\">AND <\/span><\/em><span data-preserver-spaces=\"true\">worse returns, compared to leaving things be), but I will at least sleep better at night.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Fourth, specific to 2025, real estate offers serious tax advantages. <\/span><span data-preserver-spaces=\"true\">For some individuals,<\/span><span data-preserver-spaces=\"true\"> real estate losses can offset gains in other asset classes.<\/span> <span data-preserver-spaces=\"true\">This<\/span><span data-preserver-spaces=\"true\"> can be a huge boon. I can access these losses with a specific type of investment (listing a property as a short-term rental) that I am considering for 2H 2025.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Final Thoughts<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">2025 is shaping up to be a year when investors need to tread carefully. The market\u2019s relentless optimism in the face of high rates and geopolitical uncertainty <\/span><span data-preserver-spaces=\"true\">is concerning to<\/span><span data-preserver-spaces=\"true\"> me. <\/span><span data-preserver-spaces=\"true\">Whether it\u2019s an overvalued stock market, a speculative Bitcoin rally, or still real concerns in commercial real estate, despite my speculation that we are nearing a bottom<\/span><span data-preserver-spaces=\"true\">, risks are everywhere<\/span><span data-preserver-spaces=\"true\">.<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">They say investors have two emotions: fear and greed. My analysis screams \u201cfear,\u201d and that\u2019s <\/span><span data-preserver-spaces=\"true\">exactly<\/span><span data-preserver-spaces=\"true\"> what I feel, by and large, as we head into 2025.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Please disagree, laugh at me, get angry with me, or do the digital equivalent of giving me a \u201cyou should know better than to attempt to analyze the market\u201d in the comments. <\/span><span data-preserver-spaces=\"true\">And then<\/span><span data-preserver-spaces=\"true\">, <\/span><span data-preserver-spaces=\"true\">make<\/span><span data-preserver-spaces=\"true\"> an example of <\/span><span data-preserver-spaces=\"true\">me<\/span><span data-preserver-spaces=\"true\"> over the next few years.<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">I am sure to be wrong, categorically, on multiple <\/span><span data-preserver-spaces=\"true\">points,<\/span><span data-preserver-spaces=\"true\"> or possibly every point, now that I\u2019ve committed my thoughts to writing, published them, and acted on them.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">I deserve the scorn of any pundit, the opportunity cost of my actions, and the tax consequences. <\/span><span data-preserver-spaces=\"true\">But,<\/span><span data-preserver-spaces=\"true\"> I can\u2019t help but share my analysis, thoughts, and fears with this community. It\u2019s what I think. It\u2019s what I feel. It\u2019s what I\u2019m doing.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Please do push back on any part of this analysis <\/span><span data-preserver-spaces=\"true\">that<\/span><span data-preserver-spaces=\"true\"> you disagree with\u2014starting with my observations about the money supply (M2), which <\/span><span data-preserver-spaces=\"true\">are sure to<\/span><span data-preserver-spaces=\"true\"> ruffle some feathers.<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">I\u2019d love links to other datasets that challenge my viewpoints or understanding of the money supply more broadly.<\/span> <span data-preserver-spaces=\"true\">This seems to be a central point where many investors and the market have a different view than I do.<\/span><\/p>\n\n\n\n    \n  <div id=\"visibility-group-block_3cec55112c51fba00cddf3ec600253cc\" class=\"visibility-group alignwide  hidden\">\n        \n\n<div id=\"hero-block_1c6137a12a4ae6a45e5c65375a835bdb\" class=\"first:mt-0 hero-block py-4  alignwide   has-background has-slate-200-background-color has-text-color has-theme-gold-color\">\n    <div\n        class=\"gap-10 lg:gap-20 flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 lg:w-1\/2 \">\n            <main class=\"py-4\">\n                \n\n<p class=\"has-slate-800-color has-text-color has-large-font-size\" style=\"font-style:normal;font-weight:800\">Get a Better Tax Strategy Now<\/p>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-slate-900-color has-text-color\" style=\"font-size:18px\">Connect with<strong><em> real estate<\/em><\/strong><em> <\/em><strong><em>investor-friendly <\/em>tax pros <\/strong>who create thriving, tax-efficient portfolios.<\/p>\n\n\n\n<div id=button-custom-event-block_54ffd21dfeec7ec56ccfe37917f79116 class='button-custom-event'>\n      <a href=\"https:\/\/www.biggerpockets.com\/business\/finder\/tax-and-financial-services\" x-on:click=\"window.analytics.track(&#039;Blog Block | B2C Marketplace Agent Finder&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/is-there-irrational-exuberance-in-2025-macro-environment&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\">Find a Tax Pro<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n                <div class=\"lg:w-1\/2 first:mt-0 relative h-full lg:flex lg:items-center\">\n            <img decoding=\"async\" class=\"object-cover w-full relative z-20 my-0  rounded-md hidden lg:block\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2024\/04\/Marketplace-Blog-Blocks-FinServ_Tax.png\" alt=\"investor-friendly CPAs, tax professionals, and financial planners\" title=\"\">\n        <\/div>\n            <\/div>\n<\/div>\n\n  <\/div>\n  ","protected":false},"excerpt":{"rendered":"<p>If the last two years in financial markets were a movie, they\u2019d be a mix of The Wolf of Wall Street (euphoria), Final Destination (impending doom), and Groundhog Day (rates [&hellip;]<\/p>\n","protected":false},"author":1676,"featured_media":181194,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7385],"tags":[],"class_list":["post-181183","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-wealth-management"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/181183","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/1676"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=181183"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/181183\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/181194"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=181183"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=181183"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=181183"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}