Posted on Leave a comment

Why 2022 may be good for REITs?

Real estate investment trusts are companies that own property or mortgages, and qualify for certain tax benefits by distributing a majority of their earnings to shareholders in the form of dividends. In 2021, the FTSE Nareit All REITs index made approximately 41.3% vs 28.7% (including dividends) for the S&P 500 index. An annual return of 10% doesn’t sound very sexy, but that is what Richard Hill (who manages REITs coverage for Morgan Stanley) predicts for 2022. One of the reasons being the Federal Reserve’s indication of an increased willingness to raise interest rates over the next couple of years. Morgan Stanley’s outlook for the S&P 500 ending 2022 at 4400, is another reason (because if that proves correct, and Mr. Hill’s estimate of a 10% return for REITs is also on-target, that means another year of remarkable outperformance). Source: Barron’s Streetwise.

Posted on Leave a comment

2022 is here! What’s in store for cryptocurrency and blockchain?

A blockchain is a digitally distributed, decentralized, public ledger that is shared among the nodes of a computer network. As a database, a blockchain stores information electronically in a digital format. A key difference between a typical database and a blockchain is how the data is structured. A blockchain collects data in groups, or blocks, that hold sets of information. Blocks have certain storage capacities and, when filled, are closed and linked to the previously filled block, forming a chain of data known as the blockchain. All new information that follows that freshly added block is compiled into a newly formed block that will then be added to the chain once filled.

A database usually structures its data into tables, whereas a blockchain, like its name implies, structures its data into chunks (blocks) that are strung together. This data structure inherently makes an irreversible time line of data when implemented in a decentralized nature. When a block is filled, it is set in stone and becomes a part of this time line. Each block in the chain is given an exact time stamp when it is added to the chain. Different types of information can be stored on a blockchain, but the most common use so far has been as a ledger for transactions.  (source: Investopedia).

A top challenge for the industry has been opaque regulations. The Treasury Department proposed rules that would apply a banking regulation known the travel rule to transactions in cryptocurrency. The Treasury Department said banks and cryptocurrency trading platforms would have to collect, keep and pass on records of customer’s cyrptocurrency transactions and counterparties – including verification of their identities – for any transactions exceeding $3,000. The Treasury issued its proposed rules and sought comments from the public but has yet to complete the rules. (source: Dow Jones).

Posted on Leave a comment

Long lines and strained supply chain continues

The stock market recouped some losses after selloff. Oil, U.S. stocks, European and Asian shares all had some gains.

Airlines are beginning to plan for possible flight delays associated with a new 5G cellular service going live next year.

Omicron variant causing concern as the holidays near, with long lines expected at testing centers, warehouse style retail stores, ports and points of entry. Small to medium size businesses are facing challenges, specifically restaurants, salons and “mom-and-pop” retailers.

Posted on Leave a comment

Market Update 12/20/2021

Supply chain disruptions continue to be an Achilles heel of the global economic recovery. With the holidays around the corner, some companies are generating lower than expected sales. Shortages in packaging and transportation during a critical time of the year have only made things more difficult for retailers, wholesalers, importers and exporters. A strained supply chain and broad inflation may continue, as we are seeing lumber prices rise again, reminiscent of a year ago.

Posted on Leave a comment

What happens in the markets when there is so much Government stimulus?

When Governments print money, inflation occurs. It’s that simple. We’ve seen it time and time again throughout history, and we’re seeing it now. At the gas pump, grocery store, whether you’re remodeling your home or paying for education, a new car, retirement, etc. The cost of living continues to climb in major metros. It may have dipped a little bit at the beginning of Covid-19, but living expenses are increasing across the board, and likely across the world. We are also probably going to continue experiencing market volatility.

Posted on Leave a comment

Small Business Owner’s and Real Estate

The Small Business Administration provides a lot of different funding options for entrepreneurs. If a business is going to occupy at least 51% of the total leasable space, the owner can utilize the SBA 504 program to purchase commercial real estate. This allows for as little as 10% down payment. A conventional / traditional commercial real estate (CRE) loan requires 20-30% down. There is also private money available for investment purposes; however, this tends to more expensive than the other two options mentioned. I’m a big proponent of creative financing. Stay tuned for my upcoming book: MicroFin, Dispelling the myths of creative financing and low to no down payment real estate investing.