Don’t Put it Off | Invest Now
In today’s frenzied, imminent post-COVID world, investors fall into three camps:
- The crowd-pleasers
- The fence-sitters
- The contrarians
The crowd-pleasers are investors doing what everyone else is doing. If someone’s buzzing about it on social media, the Internet, or the news, they’re jumping on the bandwagon.
The result is a feeding frenzy for stocks and crypto that has boosted the Dow and bitcoin, and other cryptocurrencies to record heights. These investors could care less about any economic truths or fundamentals. They’re going along with whatever everyone is going along with partly because it’s the only way they know how to invest and partly because of a fear of missing out (FOMO). They don’t want to be the ones left out in the cold at the water cooler.
The fence-sitters are on the other end of the spectrum from the crowd-pleasers. They’re leery of the dangers of following the crowd. They’ve seen past bubbles, and the latest boom looks like a bubble to them. They would rather sit this market out rather than risk losing it all.
The contrarians are doing something completely different from the other two groups of investors. They’re not following the herd into speculative meme stocks and crypto, but they’re not sitting on the sidelines either. They see opportunities in every market – including this one.
Contrarians never sit still because the fear of losing doesn’t enter their minds. They’ve adapted to risk and check certain boxes to mitigate most potential roadblocks and danger points.
To the contrarians, what is worse than a potential financial loss is a missed opportunity because, as H. Jackson Brown put it, “Nothing is more expensive than a missed opportunity.”
To the contrarians, what’s worse than a loss of money is a loss of time. You can get money back, but you can’t take back time. And that’s why contrarians never put off investing, and the right time to invest is always now.
Contrarians don’t sit on the sidelines because their investment approach is different from everybody else’s. While the crowd pleasers are chasing gains by playing the timing game, the contrarians play the time game.
That’s why losing time is a thorn in the side of contrarians – something they’ll avoid at all costs.
Crowd pleasers, on the other hand, could care less about time. To them, it’s all about timing – buying low and selling high. Timing the market right to make significant gains at the expense of someone else is the only game in town for them.
To the contrarians, speculating on the stock and crypto markets is a zero-sum game. In order to win, someone else has to lose, and it’s not a game they’re particularly interested in.
Contrarians aren’t interested in playing the timing game. They don’t speculate, and they don’t brush economic fundamentals aside. To them, opportunities exist in every market. You just have to follow demand.
No one will dispute the radical changes brought on by the pandemic or the new normal in the social and business climates we are all living with. True, the world has changed, but opportunities haven’t gone away. And fortune will favor those who stay in the game – the right game.
The contrarians are playing the right game. They study trends, crunch the numbers, analyze the data and metrics and allocate their assets accordingly to leverage time to generate income and appreciation that will endure in any market.
You’re probably asking yourself how contrarian investors leverage time in their investments, and the answer is simple.
The assets contrarians are drawn to produce income and appreciate over time. The longer you hold onto them, the more they give back. With stocks and crypto, there’s no guarantee down the road that they’ll be worth more than the day you bought them. This is not the case with cash-flowing real assets or income-producing businesses – especially ones that maintain steady demand even through downturns and inflationary times.
Cash flowing tangible assets rely on time, not timing to generate returns for their investors. Reliable and periodic income streams such as rental income compounds over time, and the longer you hold the asset, the longer the compounding effect as returns become exponential. Sitting out means missing out on time you can’t get back, and it means putting yourself further back from the eight ball when you could have started the compounding and wealth-building machine sooner.
Partner with Humabuilt Capital: Post-COVID Investment Opportunity.
The fact that real assets are not traded on the public markets ensures the compounding effect of their income streams…
Real estate is inherently illiquid, and passive real estate investments such as private fund or equity investments are even more illiquid, with lockup periods typically starting at a minimum of five years. This illiquidity – in a way – protects investors from themselves by preventing them from interfering in the compounding and appreciation processes.
The added benefit of the illiquidity of private real estate is that it shields it from wider market volatility and when invested in the right segments, income that is generated from recession-resistant assets that trend with inflation without faltering demand is ideal for buffering the effects of rising prices.
Contrarian investors – the wealthiest of investors – see the opportunity cost of inactivity, and they can’t imagine anything worse, and it motivates them to keep investing.
The lesson for everyone else is to not sit on the fence. You won’t be able to make up for lost time. Don’t put off investing when you can invest now!
Michael Foley, president and CEO of Humabilt Capital, oversees the entitlement process, funding, and operations for Humabuilt Capital. Mr. Foley has been a full-time real estate investor since 1995 during which time he has developed hundreds of single-family homes, townhomes, condominiums, and apartments. Mr. Foley started his investment ventures in Long Beach, California, and has expanded to Apex and Durham North Carolina. Mr. Foley is a graduate of the University of California at San Diego.