November 12, 2025 • 15 mins
"Hey Mike, the stock market seems overvalued. Do you think the real estate market is also overvalued?"
Discover the different markets you can invest in, and how some are influenced by others.
Text your questions to 913-363-1234.
Request Your Wealth Analysis by going to www.retireontime.com
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Mike (00:05):
Welcome to How to Retire On Time, a show that answers
your retirement questions. We'rehere to move past that
oversimplified advice you'veheard hundreds of times.
Instead, we're gonna dive intothat nitty gritty. So as always,
text your questions to (913)363-1234 anytime during the
week, and we'll feature them onthe show. Just remember, not
financial advice.
This is an educational show.David, what do we got today?
David (00:28):
Hey, Mike. The stock market seems overvalued. Do you
think the real estate market isalso overvalued?
Mike (00:35):
Great question.
Yeah. Yeah. So the biggest assumption here is that there's
an inverse correlation betweenthe stock market and other
markets. Now to be fair,JPMorgan did an interesting bit
of research that found if youtake your traditional portfolio
of stocks and bond funds, I saybond funds. They're not buying
(00:57):
bonds.
They're buying bond funds. Okay?Okay. Funds that actively trade
bonds. They're different.
But you take your typicalportfolio, and then you add in
around 30% in alternatives, andtheir definition of alternatives
was real estate or just otherthings you could invest in, that
they showed a potentialincrease. Historically speaking,
there was an increase in returnsand a decrease in volatility. So
(01:21):
it was a more predictable way togrow your money. What's
interesting about that is manypeople do not invest in the real
estate market. It's just thestock market and the bond
market.
The problem, though, with thisassumption is that it assumes
that the different markets willinversely correlate as in
(01:42):
they'll do the opposite. Solet's break it down first, the
stock bond relationship, andthen we'll we'll answer this
question. Okay. You need to havecontext here. The reason why the
stock bond fund portfolio sixtyforty split won a Nobel Prize
and was considered veryprofound, even though the guy
that invented it, HarryMarkowitz, never actually used
it, is because it was asimplified way that people could
(02:04):
invest in the market and holdfor a long term period of time.
A great way to grow your moneyand emotionally be able to
stomach the ups and downs. Sowhy is that the case? When the
stock market crashes, usually,the Fed will drop interest
rates. If the Fed drops interestrates, that makes money cheaper,
(02:27):
which helps the overnightlending or short term loans,
short term, you know, thebanking system, which makes
money cheaper, which can putmore money back into the
economy. Okay?
Now this is not connected, butmany people will argue that
there is a not correlation, buta rhyming scheme that if the Fed
(02:49):
drops rates, that the ten yeartreasury and other longer term
bonds will also decrease. If newbond issues, new bonds coming to
the market are at a lower rate,then the other long term bonds
that you previously held becomemore valuable.
Yeah. Because they pay a higher rate.
You can't get that anymore.
(03:09):
Okay.
I mean, imagine imagine you had a card to McDonald's
from the nineties, and you couldbuy Big Macs for 99¢. Oh, yeah.
And that was a lifetime deal.For the rest of your life, you
could buy a Big Mac for 99¢.Good deal.
Today, that's pretty good. Oryou could buy what is it? $78?
Actually, I don't go toMcDonald's often. I'm not above
McDonald's.
(03:30):
Right. Right. Love McDonald's.Yeah. Yeah.
I'm with you.
It's probably not 99¢.
No. It's not. But imagine you had that deal. Yeah. Right?
So the same thing is if you hada bond that was paying four or
5% Mhmm. And now all the newbonds were paying out two or 3%,
your bond is worth more. Yeah.So that's why when new bonds
decrease in value, your olderbonds become more valuable
(03:53):
because they're paying at ahigher rate. That's a very
complicated thing, but this iswhy it's so important is that's
usually what happens.
However, if you look back at2223, the markets were going
down. They're getting hurt. TheFed was increasing rates. Oh
gosh. They're supposed to beinversely correlated.
The Fed was increasing rates.Bond issues were also increasing
(04:15):
in value. The problem was allthe other bonds were worthless.
The stocks went down, and thebond funds went down at the same
time. They weren't inverselycorrelated.
Did you say this did happen?
Yeah. It was recently. People were saying, why are my
bonds losing money and thestocks losing money? Yeah.
Aren't they supposed to beinversely correlated?
They're not. They're separate.And if you look back at England
over the last couple of months,their version of the Federal
(04:38):
Reserve has been decreasingtheir rates, these short term
instruments, while the bonds ortheir version of the treasury,
they haven't done very well.They've stayed high. They
haven't gone down, so it hasn'tbeen the normal system, the
normal pattern.
They're not correlated. Theyjust kind of influence each
(04:58):
other. And so the stock bondfund mix is a great idea and
often works, but it doesn'talways work. They both can crash
at the same time. They both cangrow at the same time.
They can offset each other aswell.
So almost anything could happen.
Yeah. Yep. And we're in very interesting times
(05:22):
economically speaking. So thereason why I bring that up is
the real estate market is a goodhedge against inflation. It is
an uncorrelated market, but it'snot inversely correlated.
So the stock market in 2008 andthe real estate market both
crashed at the same time, butbonds did really, really well or
(05:43):
bond funds specifically. Thereare other times, like 02/2001
and o two, for example, thestock market crashed, bond funds
did really well, and real estatedid really well. So it's not
about finding the opposite orthe inverse. It's understanding
there are different independentmarkets that will affect the
(06:06):
underlying financial economicsituation. And when you start to
understand how that reallyworks, then you can make more
educated decisions on how to puttogether a portfolio.
And let me just give you thedifferent markets to consider,
and I'll define them just
for fun.
That sound good?
Yeah. Yeah. Yeah. That'll be helpful.
So the stock market or the equities market. Yep. It's just
(06:26):
think businesses. You're buyinga share of a company. In my
opinion, the intention of thatwould be to hold it for a longer
term period of time.
Because the equities market cango flat for ten plus years at a
time. It did in 2000. It did in1966. It did in 1929. It did in
nineteen o six, and it couldhappen again.
It probably will happen again. Iwould be willing to bet that
(06:48):
everyone entering retirementright now, one third of their
retirement, if they live thirtyyears in retirement, will
probably be flat in the equitiesmarket. That is my bet. Not
promising it. This isspeculation.
Yeah. But I'd be willing to betthat that is a very real
possibility, and that'schallenging. Can you imagine not
(07:09):
growing any of your money forthe first ten years of your
retirement?
That'd be tough. How do you
hedge against that? So then you've got the bond market.
The bond market is the largestmarket. Yeah. Okay?
America was built on debt.
Yeah. That'd seem bad when you hear it, but then you
realize, well, I mean, that's
Get really get Ramsay out of your head for a second.
There's good debt, and there'sbad debt.
(07:30):
Right.
Right. Ramsay talks about well, Ramsay talks about all
debt, but read my Kiplingarticle about good debt, bad
debt. They're different. Yeah.Good debt is debt that is tied
to something that isappreciating in value.
You appreciate the debt withyour house because your house
should be appreciating in value.You don't appreciate debt tied
(07:52):
to your car because your car isdepreciating in value. Your
credit card debt, it's not justdepreciating. There is no value.
Yeah.
Which sucks.
Yeah.
And there's fees on top of it, so you get hit by double
whammy. So understand thedifference of debt, and that's
an important lesson too asyou're going into retirement. Do
you pay off your mortgage whenyou retire or not? Technically,
(08:14):
you shouldn't from a financialstandpoint as long as the rates
are in your favor, but it's okayto pay off your debt anyway if
you feel better because youwanna be able to sleep well at
night. So that's the bondmarket.
The bond market is the biggestmarket and affects most all
other markets. It is thefoundation of the American
economy, debt.
K? And so debt for the federal government, what state
governments, local governments?
(08:36):
Yeah. To everyone that thinks the government should be
run like a business Uh-huh. I'mhere to tell you that is
factually not true. Because ifthat were a case, the government
then should try to make a profitoff the American people. Yeah.
Can you imagine the government,the very entity that can tax
you, trying to make a profit offof you?
Seems like a bad deal.
The purpose of the government is to absorb
(08:58):
unnecessary risks and try tostabilize a society. That's why
we have, you know, the militaryto stabilize us from invasion.
That's why we have a judicialsystem to stabilize internal
conflict. That's why we havelaws to stabilize the society.
The purpose of the government isto stabilize the society, and a
(09:19):
part of that is stabilizing thefinancial sides of our economy.
Treasuries aren't necessarily agood or bad thing. Now hold on.
Before you hate on everythingI've just said, yes, the debt's
got out of hand. I agree thedebt is too high, but running a
government surplus isn'tnecessarily the goal. If the
government surplus were tohappen, that'd be a very nice
(09:40):
thing, and then we can lowertaxes.
I'm saying that a government'sjob is not necessarily intended
to be run exactly like abusiness. It is its own thing.
That's like saying SocialSecurity is an investment. It's
not. It's an insurance plan thatthe government imposes on us
whether you like it or not, soyou might as well make the best
(10:01):
of it.
I'm not supporting big or littlegovernment. I'm not supporting
more or less taxes. I'm not infavor of high debt, and the debt
is very much getting out ofhand. And if you look at Ray
Dalio's research on governmentsand when debt spirals out of
control, it is the sign of thedownfall of that government, not
the collapse, but that it losesits global economic power, and
(10:25):
then the power shifts to anothercountry. Throughout all of time,
the Roman Empire, the BritishEmpire, any empire, debt was the
canary in the coal mine.
So I am in harmony with loweringthe debt. I'm okay if the
government doesn't have zerodebt. I don't think most people
are hung up on if there was,like, I don't know,
(10:46):
$20,000,000,000 of debt. Yeah.That's like nothing for our GDP.
You need to make sure you definegovernment different as a
business. There are things thatare similar, but they're not the
same entity, and that's a veryimportant distinction. Uh-huh.
Yeah. Stock market, bond
market. Market, all kinds of debt.
Then you've got the Federal Reserve driven markets.
(11:06):
Mhmm.
So you need to understand the Federal Reserve does not
affect the bond market. TheFederal Reserve affects your
high yield savings. Your shortterm bond or, like, bills, for
example, or short term fixedinstruments, CDs
Mhmm.
Will be affected by the Federal Reserve. Short term
fixed annuities, FederalReserve, not long term.
(11:26):
Okay.
It's five years or greater. It's probably more on
the bond market side, notdirectly correlated with the
Federal Reserve, and you need toto know the differences there.
Then you've got the commoditiesmarket. If you're investing in
commodities, you know, soy, oil,gold, and silver, I would put in
the commodities market. Somepeople would say they're
alternative.
I would argue they're morecommodities, but that's my
opinion. The real estate marketis its own market doing its own
(11:50):
thing. Then you've also got thecurrencies market, and I would
include cryptocurrencies in thatforeign exchange,
cryptocurrencies, all of that.You got the alternative market.
So collectibles, your cars, art,all of that.
That's its own market as well.You've got the private market.
The private market, its ownversion of private equities,
private debt, or credit.
(12:11):
It's just it's private, and you have to somehow get in
through some kind ofaccreditation.
Go through an adviser.
Yeah. Okay.
But, yeah, it's the private market. It's just a
different way to look at thedifferent instruments within
these different markets.
Is private markets, like, higher risk?
I would argue it's higher risk. Risk being a very relative
term here, but, because you'vegot less liquidity in the
(12:32):
investments that you have.
Okay.
You have to be an accredited investor to even
qualify, and that that thereason is because if you're an
accredited investor, you shouldknow what you're doing. Yeah.
Even though many don't. Yeah.That that's not a criticism to
accredited investors.
Sure. It's just saying, like,you know, I might be a healthy
person. Doesn't mean I I'm smartwith medical knowledge. Yeah.
(12:52):
They might have a lot of money.
Doesn't mean they know how to doa deep dive into the financials
of a company. I had one guy thatmade his money in waste
management. Many, many, multiplemillions of dollars.
His name wasn't Tony Soprano,
was it? No. Okay. It was legitimate.
Oh, yes. Alright.
And then you have the contracts market. Now the
contracts market's one of themore complicated ones. That's
(13:13):
where you've got your insuranceproducts. That's where you've
got your buffered ETFs. That'swhere you got your structured
notes.
That's where you've got youroptions trading. It's just a
different breed. It's really, inmy opinion, the underlying price
of the option contracts or thevarious contracts that make
these investments or productspossible. But you've got many,
many different markets. All ofthem are uncorrelated.
(13:35):
They might influence one or theother. There might be a flight
to safety. So if one's goingdown, money might go to another
market, but it doesn't mean thatthey're inversely correlated.
They're their own thing. Nowback to the question, is the
real estate market overvalued?
Yeah. I would argue it is. Okay.I would also argue that doesn't
(13:56):
mean you avoid it. Just like youdon't avoid the stock market
because it's right nowovervalued, understand the
timeline of the investment.
Real estate's not a short terminvestment. So if you wanna get
into real estate, you understandhow to get into real estate,
whether it's a traditional realestate, you're buying a rental,
whether it's something morealong the lines of, like, a
privately traded REIT, forexample, a Delaware statutory
(14:17):
trust, or whatever mechanism youwanna get into real estate,
that's fine. Know what you'reinvested in, know the risks
associated with it, and know thetimeline. Real estate's more of
a longer term play in myopinion. If you need money in
the short term, you don't gointo real estate.
You don't go into stocks. You gointo safer investments. If you
have a part of your assets thatyou don't need to touch for ten
(14:40):
years, then you might go intothese other markets. Does that
make sense? Like, risk is moreof a time question.
When do you need the money? Sohere's the quick review. Stock
market, bond market, FederalReserve driven market. You've
got the real estate market,commodities market, the
contracts market, the currencymarket, the private market, and
the alternative market. Thepoint being is you can become
(15:00):
wealthy in any of those markets.
You just have to understandwhich tools are intended to be
used in different places. That'sthe big takeaway. That's all the
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(15:20):
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(15:41):
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www.yourwealthanalysis.com todayto learn more and get started.
Welcome to How to Retire On Time, a show that answers
your retirement questions. We'rehere to move past that
oversimplified advice you'veheard hundreds of times.
Instead, we're gonna dive intothat nitty gritty. So as always,
text your questions to (913)363-1234 anytime during the
week, and we'll feature them onthe show. Just remember, not
financial advice.
This is an educational show.David, what do we got today?
David (00:28):
Hey, Mike. The stock market seems overvalued. Do you
think the real estate market isalso overvalued?
Mike (00:35):
Great question.
Yeah. Yeah. So the biggest assumption here is that there's
an inverse correlation betweenthe stock market and other
markets. Now to be fair,JPMorgan did an interesting bit
of research that found if youtake your traditional portfolio
of stocks and bond funds, I saybond funds. They're not buying
(00:57):
bonds.
They're buying bond funds. Okay?Okay. Funds that actively trade
bonds. They're different.
But you take your typicalportfolio, and then you add in
around 30% in alternatives, andtheir definition of alternatives
was real estate or just otherthings you could invest in, that
they showed a potentialincrease. Historically speaking,
there was an increase in returnsand a decrease in volatility. So
(01:21):
it was a more predictable way togrow your money. What's
interesting about that is manypeople do not invest in the real
estate market. It's just thestock market and the bond
market.
The problem, though, with thisassumption is that it assumes
that the different markets willinversely correlate as in
(01:42):
they'll do the opposite. Solet's break it down first, the
stock bond relationship, andthen we'll we'll answer this
question. Okay. You need to havecontext here. The reason why the
stock bond fund portfolio sixtyforty split won a Nobel Prize
and was considered veryprofound, even though the guy
that invented it, HarryMarkowitz, never actually used
it, is because it was asimplified way that people could
(02:04):
invest in the market and holdfor a long term period of time.
A great way to grow your moneyand emotionally be able to
stomach the ups and downs. Sowhy is that the case? When the
stock market crashes, usually,the Fed will drop interest
rates. If the Fed drops interestrates, that makes money cheaper,
(02:27):
which helps the overnightlending or short term loans,
short term, you know, thebanking system, which makes
money cheaper, which can putmore money back into the
economy. Okay?
Now this is not connected, butmany people will argue that
there is a not correlation, buta rhyming scheme that if the Fed
(02:49):
drops rates, that the ten yeartreasury and other longer term
bonds will also decrease. If newbond issues, new bonds coming to
the market are at a lower rate,then the other long term bonds
that you previously held becomemore valuable.
Yeah. Because they pay a higher rate.
You can't get that anymore.
(03:09):
Okay.
I mean, imagine imagine you had a card to McDonald's
from the nineties, and you couldbuy Big Macs for 99¢. Oh, yeah.
And that was a lifetime deal.For the rest of your life, you
could buy a Big Mac for 99¢.Good deal.
Today, that's pretty good. Oryou could buy what is it? $78?
Actually, I don't go toMcDonald's often. I'm not above
McDonald's.
(03:30):
Right. Right. Love McDonald's.Yeah. Yeah.
I'm with you.
It's probably not 99¢.
No. It's not. But imagine you had that deal. Yeah. Right?
So the same thing is if you hada bond that was paying four or
5% Mhmm. And now all the newbonds were paying out two or 3%,
your bond is worth more. Yeah.So that's why when new bonds
decrease in value, your olderbonds become more valuable
(03:53):
because they're paying at ahigher rate. That's a very
complicated thing, but this iswhy it's so important is that's
usually what happens.
However, if you look back at2223, the markets were going
down. They're getting hurt. TheFed was increasing rates. Oh
gosh. They're supposed to beinversely correlated.
The Fed was increasing rates.Bond issues were also increasing
(04:15):
in value. The problem was allthe other bonds were worthless.
The stocks went down, and thebond funds went down at the same
time. They weren't inverselycorrelated.
Did you say this did happen?
Yeah. It was recently. People were saying, why are my
bonds losing money and thestocks losing money? Yeah.
Aren't they supposed to beinversely correlated?
They're not. They're separate.And if you look back at England
over the last couple of months,their version of the Federal
(04:38):
Reserve has been decreasingtheir rates, these short term
instruments, while the bonds ortheir version of the treasury,
they haven't done very well.They've stayed high. They
haven't gone down, so it hasn'tbeen the normal system, the
normal pattern.
They're not correlated. Theyjust kind of influence each
(04:58):
other. And so the stock bondfund mix is a great idea and
often works, but it doesn'talways work. They both can crash
at the same time. They both cangrow at the same time.
They can offset each other aswell.
So almost anything could happen.
Yeah. Yep. And we're in very interesting times
(05:22):
economically speaking. So thereason why I bring that up is
the real estate market is a goodhedge against inflation. It is
an uncorrelated market, but it'snot inversely correlated.
So the stock market in 2008 andthe real estate market both
crashed at the same time, butbonds did really, really well or
(05:43):
bond funds specifically. Thereare other times, like 02/2001
and o two, for example, thestock market crashed, bond funds
did really well, and real estatedid really well. So it's not
about finding the opposite orthe inverse. It's understanding
there are different independentmarkets that will affect the
(06:06):
underlying financial economicsituation. And when you start to
understand how that reallyworks, then you can make more
educated decisions on how to puttogether a portfolio.
And let me just give you thedifferent markets to consider,
and I'll define them just
for fun.
That sound good?
Yeah. Yeah. Yeah. That'll be helpful.
So the stock market or the equities market. Yep. It's just
(06:26):
think businesses. You're buyinga share of a company. In my
opinion, the intention of thatwould be to hold it for a longer
term period of time.
Because the equities market cango flat for ten plus years at a
time. It did in 2000. It did in1966. It did in 1929. It did in
nineteen o six, and it couldhappen again.
It probably will happen again. Iwould be willing to bet that
(06:48):
everyone entering retirementright now, one third of their
retirement, if they live thirtyyears in retirement, will
probably be flat in the equitiesmarket. That is my bet. Not
promising it. This isspeculation.
Yeah. But I'd be willing to betthat that is a very real
possibility, and that'schallenging. Can you imagine not
(07:09):
growing any of your money forthe first ten years of your
retirement?
That'd be tough. How do you
hedge against that? So then you've got the bond market.
The bond market is the largestmarket. Yeah. Okay?
America was built on debt.
Yeah. That'd seem bad when you hear it, but then you
realize, well, I mean, that's
Get really get Ramsay out of your head for a second.
There's good debt, and there'sbad debt.
(07:30):
Right.
Right. Ramsay talks about well, Ramsay talks about all
debt, but read my Kiplingarticle about good debt, bad
debt. They're different. Yeah.Good debt is debt that is tied
to something that isappreciating in value.
You appreciate the debt withyour house because your house
should be appreciating in value.You don't appreciate debt tied
(07:52):
to your car because your car isdepreciating in value. Your
credit card debt, it's not justdepreciating. There is no value.
Yeah.
Which sucks.
Yeah.
And there's fees on top of it, so you get hit by double
whammy. So understand thedifference of debt, and that's
an important lesson too asyou're going into retirement. Do
you pay off your mortgage whenyou retire or not? Technically,
(08:14):
you shouldn't from a financialstandpoint as long as the rates
are in your favor, but it's okayto pay off your debt anyway if
you feel better because youwanna be able to sleep well at
night. So that's the bondmarket.
The bond market is the biggestmarket and affects most all
other markets. It is thefoundation of the American
economy, debt.
K? And so debt for the federal government, what state
governments, local governments?
(08:36):
Yeah. To everyone that thinks the government should be
run like a business Uh-huh. I'mhere to tell you that is
factually not true. Because ifthat were a case, the government
then should try to make a profitoff the American people. Yeah.
Can you imagine the government,the very entity that can tax
you, trying to make a profit offof you?
Seems like a bad deal.
The purpose of the government is to absorb
(08:58):
unnecessary risks and try tostabilize a society. That's why
we have, you know, the militaryto stabilize us from invasion.
That's why we have a judicialsystem to stabilize internal
conflict. That's why we havelaws to stabilize the society.
The purpose of the government isto stabilize the society, and a
(09:19):
part of that is stabilizing thefinancial sides of our economy.
Treasuries aren't necessarily agood or bad thing. Now hold on.
Before you hate on everythingI've just said, yes, the debt's
got out of hand. I agree thedebt is too high, but running a
government surplus isn'tnecessarily the goal. If the
government surplus were tohappen, that'd be a very nice
(09:40):
thing, and then we can lowertaxes.
I'm saying that a government'sjob is not necessarily intended
to be run exactly like abusiness. It is its own thing.
That's like saying SocialSecurity is an investment. It's
not. It's an insurance plan thatthe government imposes on us
whether you like it or not, soyou might as well make the best
(10:01):
of it.
I'm not supporting big or littlegovernment. I'm not supporting
more or less taxes. I'm not infavor of high debt, and the debt
is very much getting out ofhand. And if you look at Ray
Dalio's research on governmentsand when debt spirals out of
control, it is the sign of thedownfall of that government, not
the collapse, but that it losesits global economic power, and
(10:25):
then the power shifts to anothercountry. Throughout all of time,
the Roman Empire, the BritishEmpire, any empire, debt was the
canary in the coal mine.
So I am in harmony with loweringthe debt. I'm okay if the
government doesn't have zerodebt. I don't think most people
are hung up on if there was,like, I don't know,
(10:46):
$20,000,000,000 of debt. Yeah.That's like nothing for our GDP.
You need to make sure you definegovernment different as a
business. There are things thatare similar, but they're not the
same entity, and that's a veryimportant distinction. Uh-huh.
Yeah. Stock market, bond
market. Market, all kinds of debt.
Then you've got the Federal Reserve driven markets.
(11:06):
Mhmm.
So you need to understand the Federal Reserve does not
affect the bond market. TheFederal Reserve affects your
high yield savings. Your shortterm bond or, like, bills, for
example, or short term fixedinstruments, CDs
Mhmm.
Will be affected by the Federal Reserve. Short term
fixed annuities, FederalReserve, not long term.
(11:26):
Okay.
It's five years or greater. It's probably more on
the bond market side, notdirectly correlated with the
Federal Reserve, and you need toto know the differences there.
Then you've got the commoditiesmarket. If you're investing in
commodities, you know, soy, oil,gold, and silver, I would put in
the commodities market. Somepeople would say they're
alternative.
I would argue they're morecommodities, but that's my
opinion. The real estate marketis its own market doing its own
(11:50):
thing. Then you've also got thecurrencies market, and I would
include cryptocurrencies in thatforeign exchange,
cryptocurrencies, all of that.You got the alternative market.
So collectibles, your cars, art,all of that.
That's its own market as well.You've got the private market.
The private market, its ownversion of private equities,
private debt, or credit.
(12:11):
It's just it's private, and you have to somehow get in
through some kind ofaccreditation.
Go through an adviser.
Yeah. Okay.
But, yeah, it's the private market. It's just a
different way to look at thedifferent instruments within
these different markets.
Is private markets, like, higher risk?
I would argue it's higher risk. Risk being a very relative
term here, but, because you'vegot less liquidity in the
(12:32):
investments that you have.
Okay.
You have to be an accredited investor to even
qualify, and that that thereason is because if you're an
accredited investor, you shouldknow what you're doing. Yeah.
Even though many don't. Yeah.That that's not a criticism to
accredited investors.
Sure. It's just saying, like,you know, I might be a healthy
person. Doesn't mean I I'm smartwith medical knowledge. Yeah.
(12:52):
They might have a lot of money.
Doesn't mean they know how to doa deep dive into the financials
of a company. I had one guy thatmade his money in waste
management. Many, many, multiplemillions of dollars.
His name wasn't Tony Soprano,
was it? No. Okay. It was legitimate.
Oh, yes. Alright.
And then you have the contracts market. Now the
contracts market's one of themore complicated ones. That's
(13:13):
where you've got your insuranceproducts. That's where you've
got your buffered ETFs. That'swhere you got your structured
notes.
That's where you've got youroptions trading. It's just a
different breed. It's really, inmy opinion, the underlying price
of the option contracts or thevarious contracts that make
these investments or productspossible. But you've got many,
many different markets. All ofthem are uncorrelated.
(13:35):
They might influence one or theother. There might be a flight
to safety. So if one's goingdown, money might go to another
market, but it doesn't mean thatthey're inversely correlated.
They're their own thing. Nowback to the question, is the
real estate market overvalued?
Yeah. I would argue it is. Okay.I would also argue that doesn't
(13:56):
mean you avoid it. Just like youdon't avoid the stock market
because it's right nowovervalued, understand the
timeline of the investment.
Real estate's not a short terminvestment. So if you wanna get
into real estate, you understandhow to get into real estate,
whether it's a traditional realestate, you're buying a rental,
whether it's something morealong the lines of, like, a
privately traded REIT, forexample, a Delaware statutory
(14:17):
trust, or whatever mechanism youwanna get into real estate,
that's fine. Know what you'reinvested in, know the risks
associated with it, and know thetimeline. Real estate's more of
a longer term play in myopinion. If you need money in
the short term, you don't gointo real estate.
You don't go into stocks. You gointo safer investments. If you
have a part of your assets thatyou don't need to touch for ten
(14:40):
years, then you might go intothese other markets. Does that
make sense? Like, risk is moreof a time question.
When do you need the money? Sohere's the quick review. Stock
market, bond market, FederalReserve driven market. You've
got the real estate market,commodities market, the
contracts market, the currencymarket, the private market, and
the alternative market. Thepoint being is you can become
(15:00):
wealthy in any of those markets.
You just have to understandwhich tools are intended to be
used in different places. That'sthe big takeaway. That's all the
time we've got for the showtoday. If you enjoyed the show,
consider subscribing to itwherever you get your podcasts.
Just search for how to retire ontime.
Discover if your portfolio isbuilt to weather flat market
(15:20):
cycles or if you're missing taxminimization opportunities that
you may not even know exist.Explore strategies that may be
able to help you lower youroverall risk while potentially
increasing your overall growthand lifestyle flexibility. This
is not your ordinary financialanalysis. Learn more about Your
Wealth Analysis and what itcould do for you regardless of
(15:41):
your age, asset, or targetretirement date. Go to
www.yourwealthanalysis.com todayto learn more and get started.
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