Your Survival Guy

Preparing your investments and family for when disaster strikes.

Disclosure

  • Home
  • Your Survival
    • EMP Threat
    • Tucker Explains
    • Newport Gas Outage
    • Water
      • Emergency Water Storage
      • Let There Be Water
    • Get Your Gun and Your Training Now
    • Satellite Phones
    • Navy SEAL Survival Kit
  • Your Money
    • Coronavirus Infects Stock Market
    • Looking for a Better America
    • You Invest, They Win
    • Where to Keep Your Cash
    • Paris
    • How to Buy a Boat
    • Dead or Alive? The Future of Long-Term Investing
    • Is Vanguard too Big?
    • Cryptocosm and Life After Google
    • The Last Intelligence Report
    • The Truth Behind the S&P 500
    • RAGE Gauge
    • How Many “Retirees” Will Keep Working?
    • Your Retirement Life
    • You’ll Love This if You’re Dreaming of an Active Retirement Life
  • Weapons
    • Self Defense
    • Every Family Should Own at Least One Shotgun: Here Are Three
  • About Me
    • Preparing for Times Like These
    • My Videos/Pics
    • Music
      • RIP Neil Peart: You Will Always Be Remembered as a “Modern-Day Warrior”
  • You
    • Our Cabin on Kodiak, Alaska
    • If You Are in Pain, this May Help. It Helped Me.
    • How to Save for a Grandchild
    • FIRE! Financial Independence, Retire Early
    • Compound Interest
    • Arithmetic of Portfolio Losses
    • Maximum Portfolio Withdrawal Rate
    • An Efficient Frontier
    • Retirement Compounders
    • Counterbalanced Total Returns
  • Survive & Thrive
    • January 2021
    • December 2020
    • November 2020
    • October 2020
    • September 2020
    • August 2020
    • July 2020
    • June 2020
    • May 2020
    • April 2020
    • March 2020
    • February 2020
    • January 2020
    • December 2019
    • November 2019
    • October 2019
    • September 2019
    • August 2019
    • July 2019
    • June 2019
    • May 2019
    • April 2019
    • March 2019
    • February 2019
    • January 2019
    • December 2018
    • November 2018
    • October 2018
    • September 2018
    • August 2018
    • July 2018
    • June 2018
    • May 2018
    • April 2018
    • March 2018
    • February 2018
    • Welcome

You Can’t Time the Market: When Hubris Fails

May 18, 2020 By E.J. Smith - Your Survival Guy

By isak55 @ Shutterstock.com

Coronavirus Infects Stock Market: Part XLVIII

You can’t time the market. Don’t even try, because you just might end up being wrong.

Consider commercial real estate, for example. Anyone want to buy a high rise in Manhattan?

Let’s hop in our time machine and look back to 2018 when the stock market was having a rough year. The DJIA ended the year down close to six percent.

Big bad pensions wanted nothing to do with stocks. They wanted the “safety,” the “reliability of,” wait for it—commercial real estate.

Let’s roll the footage (WSJ article Nov. 2018):

U.S. public pension funds are taking on more real estate, and at times some of the riskiest types of property investments, as they try to close their funding gaps.

American public plans with more than 20,000 members had an average 7% of their assets in real-estate investments at the end of 2017, according to a Wall Street Journal analysis of Boston College’s Public Plans Data, which contains the most recent numbers available. That is up from 4% in 2006, representing more than $120 billion in additional pension money flowing into real estate.

Some of this increase is due to the construction of new properties designed to be sold later for a profit. These so-called opportunistic investments by pensions grew nearly sixfold between 2006 and 2016 even as allocations to “core” existing properties remained flat, according to an analysis by CEM Benchmarking.

One pension consultant advised an increase in “core” (read commercial) real estate, probably because it was going up in value, and more than likely, assets that are going up are an easy sell to the pension board.

Imagine the 30-foot conference table, the business suits, the presentations, the hubris, and you get the picture.

Pension boards are all about protecting jobs: their own that is.

If some fancy consulting team advises real estate and then the pension fund follows their advice, then there’s no one to blame. Perfect.

Here’s what our billion-dollar soothsayer said:

“In a core property, you have a known source of income on day one and, depending on the lease structure, you have a pretty good understanding of future rents. Versus something you’re going to build today, which you’re not even sure if you’re going to have a tenant.”

How’s that known source of income working out?

The following two tabs change content below.
  • Bio
  • Latest Posts
My Twitter profileMy Facebook profileMy Instagram profile

E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zilldjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com
My Twitter profileMy Facebook profileMy Instagram profile

Latest posts by E.J. Smith - Your Survival Guy (see all)

  • Smith Family Robinson in Live Free or Die, NH - January 19, 2021
  • Are $2,000 Checks Going to Rebuild NYC? - January 15, 2021
  • The Fed is Sacrificing Retirees to Save the Banks - January 15, 2021
  • How Are You Doing on a Local Level? - January 14, 2021
  • February RAGE Gauge: Americans Focusing on What’s In Front of Them - January 14, 2021

If you enjoyed this post, email it to a friend:

  • Email
  • Print
  • Facebook
  • LinkedIn
  • Twitter
  • WhatsApp

Related Posts

Trending

  • H2O, Skiing, Hiding A$$ET$, Bitcoin, Ammo & More
  • There's Always a Way Forward for Americans Like YOU
  • America 2022: Time to Take Back What's Ours
  • What Living in Two Americas Looks Like Today
  • Why Buying Bonds Matters in Times Like These
  • Great Reset, Swiss Way, and Living YOUR WAY
  • How Are You Doing on a Local Level?
  • Stocks: Are You Sticking Your Neck Out Too Far?
  • Be Prepared for Another Great Lockdown, Recession, or Reset
  • February RAGE Gauge: Americans Focusing on What's In Front of Them

YOUR SURVIVAL GUY MUST READS

  • Don’t Sweat It When She Asks, “Do We Have Anything to Watch Tonight?”
  • You Owe it to Yourself to Continue Doing What You’re Good At
  • Are You OK with Election Fraud? I’m Not. Here’s Why
  • A FAST Way to Lose SLOW Money
  • Here’s Why You Should Treat Your Disaster Cash like Gold
  • Jimmy Buffett’s: A Pirate Looks at 40
  • Chelsea, MA Gives $300/Month You’ll Eventually Pay For
  • News of Secret 6th- Generation Fighter Jet Takes Flight
  • Why Your Retirement Survival is No Easy Task
  • “Trump Deserves It” Cries the Left: Fall in Line—or Else
Only if You’re Serious
Only if You’re Serious
Only if You’re Serious
Escape the City
Smith Family Robinson
Only if You’re Serious
Why Vanguard is Too Big for YOU
See Who's Missing the Boat
You Invest, They Win
Emergency Water Storage
Emergency Water Storage
Emergency Water Storage
Why Fidelity is Number One

Copyright © 2021 | Terms & Conditions

loading Cancel
Post was not sent - check your email addresses!
Email check failed, please try again
Sorry, your blog cannot share posts by email.