Investor · Minnesota & Kansas · Member since 2020 · 176 posts · 75 votes
Hey Guys-anyone else think what is going on with the stock market is just simply weird? Another great reason why we love real estate is we have a lot more control on the asset class directly (or indirectly with partners in syndications).
For anyone who has not been benefiting from the stock market bull run and volatility, it is always going to be easy to say that stock market volatility is the reason to stay away from it and therefore real estate is a better investment 😏
Super weird. Here's an email we wrote on the topic.
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What Does This Mean For Those Invested in Real Estate?
In a nutshell, not a whole lot. Except for peace of mind that their hard-earned money is in the right place. Every investment entails some level of risk; no investment is a 100% guarantee. But what is 100% is that a band of Reddit Users isn't going to surge or manipulate the Multifamily Real Estate Market and Picasso your portfolio.
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I totally agree that the stock market is acting unusual. It appears that with a lot of the government stimulus bills being passed many people are investing those extra funds into assets such as stocks, ETFs, low-cost index funds, and other financial securities. But this emotionally-fueled investing mostly from fear is elevating the market value above the intrinsic value of these various financial securities. At the same time because the government is continually "printing" more money than they have through the sale of treasury bonds that drives the yield curve rates on those bonds down. Not to mention that the covid pandemic has sparked a lot of uncertainty in investors raising the demand for those government bonds higher and driving down the interest rates even lower. The point is that usually when the stock market is doing well the government has to increase the interest rates on the bonds to incentivize their purchase, and when the stock market is doing poorly the bonds have lower interest rates cause of greater demand for them. But right now due to covid we have a weird circumstance where the market is "doing well" (not really though) and the bond's interest rates are low. Either way, I think it would be best to start building up some cash reserves on the side to capitalize on the inevitable true bear market that is to come. All the best. @Toby Khan
I just so happened to pick up some AMC as part of my "Covid Rebound" stock picks (which I plan to liquidate in 12-18 months). AMC was 2.17/share when I grabbed it, well before all of this Reddit YOLO stuff took off.
Here's my analogy - "Robinhood People" - we "the small guy" kicked hedgefund's a**
Robinhood users - 13 Million
Avg balance - $10,000
Robinhood Pot Money - $130 Billion
that's enough fire power to take on any stock and any hedge fund out there - the crowd decides the rise and fall of any ticker symbol - definitely risky but it has opened up a new equation in the stock industry....
and these mushroom groups in reddit and webull forums are going to shake up the stock markets...
and yes the COVID + stimulus checks played a factor as folks were sitting home on thier apps - load up Robinhood with $600 stimulus check and Fire up :-)
For anyone who has not been benefiting from the stock market bull run and volatility, it is always going to be easy to say that stock market volatility is the reason to stay away from it and therefore real estate is a better investment 😏
real estate is not always better than stock market, if you know how to play the stock market well like what the banks and professional did and with fully hedged position, it's actually safer than investing in real estate game. Of coz if you buy GME at 300 one will say real estate is better ha ha .. lol
I don't think the stock market is acting "weird". I think the stock market is performing exactly how investors FEEL towards the short term. I dollar cost average into both stock market and real estate. So I guess it doesn't really matter what either market does in the short term so long as I have ample reserves.