In This Era of Change, Where are You Investing?

How are you adhering to all the changes over the last 5-10 years? 

There is a world of change that has been underway for several years and it is unraveling fast!

New eras are upon us and COVID-19 catapulted many of those changes to happen sooner. 

Many changes have occurred after COVID-19 arrived that weren’t anticipated.

This is an historic time and so much is happening that its difficult to keep up. 

More than anything, awareness is key. 

Let’s go over a few economic changes pre COVID-19 and then cover present day. 

As you read through the examples, analyze these concepts from an investor mindset. 

As a part of growth, change is a component. You can growth with the change, learn, apply your knowledge and take action to be apart of the change to your benefit. 

Let’s get started.

Before COVID-19

Marijuana – 

Marijuana has been legalized in multiple aspects in several states. However, the companies that cater to this industry and their stocks haven’t taken off how originally anticipated by now.

There are many political restraints that are causing the stagnation of this market. Needless to say, there are medicinal benefits of the product, but markets are not yet flourishing due to many factors. Taxes, mandates, federal support and politics all play a role. 

• Monday March 28, 2022 we shared a publication that recites the current state of the market well. See the video here.

Its a great recap and analysis of where the industry is poised to land.

Streaming – 

Streaming has become ever so popular and has taken off everywhere. The ability to watch videos and connect to multiple networks through application software has challenged viewable content as we know it. It also has been a pilar in several company’s growth like Uber, Lyft and any app based media content provider.

Cable networks will need to adapt or face lower market share and consumer sentiment. Streaming content has been popularly known by the rise of Netflix. Netflix is one of many companies who lead the way in the streaming industry.

Cable TV will not be the same in the decades to come. Adapt or fail will be the decision point for any cable conglomerates.

Energy –

The transition to new energy sources has been a topic of discussion prior to entering the new century. It has been well documented that a new energy source is needed worldwide for sustainability. 

Natural gas, coal, wind, solar and hydro energy have been proposed and reviewed. However, we are in the time of needing execution of this transition.

Today, we have seen much support and communication behind the electric cars due to most oil consumption stemming from vehicle transportation.

Check out this fact sheet from Whitehouse.gov outlining forward planning.

Ecommerce –

For the last 25 years, the internet has caused the demand for innovative shopping and online business representation. This wave started a new crave in business representation online which quickly translated into online shopping. With a click of the mouse, a consumer could place an order that would be delivered to their home without visiting a brick and mortar location.

Amazon was first of many who took heed to this and began its business structure with a focus on an online presence. With a focus on consumer sentiment, Amazon did not focus so much on product type, but more so on customer engagement. A new level of convenience had made itself known.

Today, ecommerce and industrial facilities that support this network, have been the strongest and highest growing in the real estate market for over 10 years. The future of ecommerce is changing the landscape of real estate and the use of real estate as we know it. 

Retail – brick and mortar locations have seen huge demand in transitioning their business to support the online shopper or face failure.

In the next 10 years, we will see how malls will transition with this change.

Artificial Intelligence (AI) –

Along with streaming, artificial intelligence has adapted its way into our everyday lives. Most technology we use today has AI embedded in it. From cell phones, to TV’s, to refrigerators, to mobile application, to cars, to internet activity, AI is here to stay.

AI is used by many to better understand the customer, by observing our online activities. Tesla and its self driving cars are thanks for AI. Alexa is thanks to AI. Also within robotics, AI is embedded allowing robots to mimic living beings.

This form of intelligence produces higher level engagement within commerce and is highly dependent on AI. AI is here to stay and is incorporating itself more and more into our society.

It is interesting to imagine what our society will look like in 20 years.

Facial recognition and other forms of virtual reality and augmented reality are the next waves.

Crypto – 

Crypto currency was once an idea that was introduced to me back in the early 1990’s. Boy do I wish I would have invested in it then. Who knew that a form of currency would be produced by use of the internet and blockchain?

To learn about this journey, I invite you to watch a documentary called Trust Machine – The Story of Blockchain. It’s very enlightening to how the industry was formed and the basis of it’s structure.

With the popularity of Bitcoin, Ethereum and NFT’s, crypto is here to stay. Many countries have allowed it or banned it due to it being a non-centralized based currency. 

Many countries are adopting ways to secure the currency and make it conceivable to the masses.

Crypto currency is here to stay. We will see how it translates into our society. See the video here about how Austin, TX plans to be a leader in crypto innovation.

After COVID-19 Effects

Housing – 

Housing has underwent such dramatic change in so little time its astounding. 

Due to safety concerns, the exodus from densely populated metro areas have taken place over the last 1-2 years. The demand for housing with more space to work from home, to exercise, to have ample yard space outdoor activities and to live within proximity to a large metropolitan area has grew substantially.

The trend of moving to suburban areas will not change and most of it has been supported by many companies who are allowing a portion of their workforce to work from home. This is another new norm has been injected itself into our society.

It will be interesting to see how this dynamic changes the face of business and business operations going forward. Whether it will be a healthy change is yet to be known. What we do know is, it will be safer. 

However, company culture may face change that we won’t realize until at least 3-5 years from now. With this being a touchy topic, corporate spokespeople are not discussing the topic in depth publicly. As bottom lines are affected, I see this coming back up and perhaps being changed back to pre-COVID expectations as the pandemic subsides or goes away.

Perhaps, companies will sell these homes down the road and take profits? Of course, the time they purchased these homes during the pandemic will likely be ideal for a nice return on investment.

We shall see the trajectory of housing and the many changes COVID-19 has caused.

Renting –

With housing supply being so low and rent rates lagging the CPI (consumer price index) due to moratoriums, the increases in rent rates have been historic over the last year. Markets like Austin, Texas have seen 40% increases in rent rates.

As many consumers are learning, they are seeing that balance in the market is a component that affects us all economically. As the cost of houses increase, the cost of rent follows. In our case, the moratoriums allowed the delay of this cadence. 

With the moratoriums approaching a year since ending, the increases in rent have been aggressive and ongoing.

Without available houses to buy, many are forced to rent. 

When housing for purchasing becomes more readily available, will there be a significant exodus from renters to homeowners due to the “pinned up” demand?

Perhaps in a city like Austin, having many millennials and Gen Z residents, this will take place.

Inflation –

With labor being difficult to fulfill, unfortunately we’ve seen many companies go out of business. 

As a proponent of COVID-19, we have seen labor go unfulfilled or fulfilled much lower than the demand, worldwide. Unemployment and stimulus payments afforded many of us to not need to work. 

This has directly affecting inventory levels of supplies across all industries. The by-product of these effects are inflation. 

We are also seeing rising mortgage rates, as the FED attempts to rebalance the country after issuing out the stimulus payments that allowed us to stabilize the economy temporarily.

The after effect of all that has occurred with labor and stimulus payments, is higher prices for products when demand is high and supply is low. Therefore, inflation has settled in much of the world and is affecting daily lifestyles worldwide.

Consumers will have less free cash, which will affect daily spending, investing and habit change. 

As seen in the stock market, less consumers have been investing and many indexes plummeted over the last few months. Expectations of bitcoin being much higher than it is currently, also prompted investors to take profits from other investments. This extraction of assets was noticed in the market as well. 

Clickbait – 

With so much misdirection and click-bait, the talk of a housing bubble has caused many consumers to think that housing will take a dip and their buying opportunity will come soon. 

As many are beginning to realize, market prices are less likely to decline unless rates increase so high that many consumers are priced out of the market or inventory is produced at a rate that it offsets demand and brings prices lower. 

With supply being the most predominant factor related to housing prices, many consumers are slowly realizing we are not in a bubble and are very unlikely to see prices “deflate”. Housing prices are related to simple supply and demand and nothing can cause dramatic change in that factor except inventory. 

The fed is expected to raise rates 6-7 times this year and as of this week (3/28/22) rates are at 4.95%. We will see where we land.

Investing Summary

Overall, investing is still upon us within all of these channels. 

The era of change is here and will continue to launch. Take heed and act accordingly.  

Some took advantage of the market dip when COVID-19 occurred and saw nice profits and the market regained momentum soon after. 

I feel opportunities are, and will be, abundant across several markets. 

Calculated decisions are very important today when it comes to investing. Especially in the stock market. 

However, I feel investing now could be a very lucrative time.

Real estate is super hot and will stay that way and with housing being unabundant, many consumers will have funds for investing but perhaps not enough for a house. 

This will lead them to the stock market to temporarily place their money in the market over the next 3-5 years until they can buy a home.

In this sense, whether investing in real estate or stocks, the time could be very lucrative.

Thanks for joining us today faithful readers- future leaders.

Love ya and continue to strive for growth.

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Please comment your thoughts on the current market and it’s investing opportunities.