Is the market going to crash in 2021? What’s the best investment? When there’s an upheaval in the market, the old “traditional” way of investing just won’t cut it anymore… We need Alternatives.”
(Jacksonville, FL. January 11, 2020) The first quarter of 2020 acted as a wake-up call to hundreds of millions of citizens. Every pandemic is unique in its own way, and COVID was no different as it seemed to pinpoint and emphasize the importance of wealth preservation through diversification.
Bank CDs, large-cap stocks, bonds, and even savings accounts- assets that were once considered cash “safe-havens” had become anything but that due to fear, QE /inflation, and distrust in the dollar’s future. America’s stock market saw a near 37% decline in March alone.
A snowball effect causing 50 million citizens to file for unemployment, the highest since the great depression. HNWI were not spared either – according to a recent Barron’s article, the world’s top 100 billionaires lost $408 Billion in net worth in just two months. Forbes believes that it will get much worse with estimates of $3.1 up to $8.1 Trillion to be erased from HNWI’s worth in the year 2020 alone due to Coronavirus.
However, on the other end of the spectrum, reports have found that the U.S added 29 more billionaires to the list, and over $637 Billion added to existing billionaires net-worth within that same period. How was this possible? Diversification.
These individuals were anything but your traditional investors. Their portfolio weighted in alternative investments like CRE, Marijuana, and Startups. Sectors that provide stability with steady growth, dynamic growth, or a combination of the two.
Regardless of what is going on in the world, one thing is for sure, we all need somewhere to live. Commercial real estate or (CRE) investors understand this all too well. And although an average 10% annual return may have seemed “too conservative” before the pandemic, now it is everything but that.
It’s not to say that the CRE industry was unaffected by COVID, because, with millions of jobless Americans unable to pay their rent, some downturn was inevitable. Then came the passing of the CARES Act, which made way for mortgage forbearance.
Sure, 2021’s T12’s for any CRE investment may look a “bit” battered from 2020’s Q1 and Q2 “performance,” – but the demand for high valued properties has never been as high.
In-fact, a monthly report published by the (NAR) National Association of REALTORS Research Group – shows that while cap rates for transactions in the first quarter of 2020 fell to 6.5%, commercial prices rose by 1%.
And even more so during a pandemic! How did COVID affect the legal marijuana industry? Well, By the end of March 2020, 50% of U.S. states had classified their legal cannabis companies as “essential” businesses. Most Marijuana businesses were allowed, and some even ordered to keep their doors open.
Even before the quarantine mandates, lines of patients wrapped around dispensary buildings were broadcasted all over the news. While many were flocking to their local grocery store for toilet paper, patients lined up for their medicine and a different type of paper. Year to date, by June 2020, legal marijuana sales had seen a near 40% increase compared to its 2019 performance.
A mix of emotions and reasoning drove this spike. Some patients were making larger, “just-incase” purchases out of fear of the unknown, while others waited in hope for a Corona “Cure” strain discussed by leaders in the industry.
That’s right, marijuana that not only cured but also prevented COVID. Of course, this caught the attention of millions – which leads us to our next topic.
As the law of polarity states, where there is bad, there is also good, and the same can be said about COVID. But the “good” didn’t just appear; Entrepreneurs created it.
Just as the Entrepreneurs in the Cannabis industry aimed to provide solutions to COVID through their platform, so did many startups in other sectors – health, food, technology, hospitality, and entertainment, to name a few.
Yes, COVID caused over 70% of all small businesses to shut down in March 2020 alone, temporarily, but don’t forget that small businesses create 1.5 million jobs annually and account for 64% of all new jobs created in America.
Some believe that we are on the cusp of the next industrial revolution. If so, Angel investing / convertible notes, VC, and other startup investment methods will continue to grow in popularity.
Think Uber, Airbnb, and similar companies. If you had a chance to invest in companies that had so much upside years after initial funding… would you?
Here at www.Evestmarketplace.com, Our goal is to continue to discover and share those opportunities with you, our audience. Although we are senior leaders and heavily invested in the CRE space, above all else, we aim to achieve maximum results through sound investments no matter how unique or “alternative” they may be.