The people of Great Britain decided to shoot themselves and punch the rest of the world in the face by leaving the European Union (Leave 52% versus Remain 48%). As a result, the pound fell to it's lowest levels in 35 years and global markets lost over four trillion ($4 trillion+) on Black Friday!
This black swan event is another reminder why I prefer other alternative investments like real estate over buying public stocks. For example, in real estate, there aren't so many random unforeseen variables that could punish your investment brutally. Rental income comes in like clockwork every month and there's so many things you can "control" to make the value of your real estate go up.
Unless you're a billionaire or run a huge hedge fund, being a minority investor with no say or control in your investment is just the way of life for stock investors. If you're not an activist, you have no control of what your stocks can do in the future. Let's discuss briefly why Great Britain chose to exit the EU, and what may happen next.
Why Great Britain Voted To Leave The EU For Good
QUICK SUMMARY: At the end of the day, the British people wants what everyone wants in the world: the freedom to choose. I admire this wholeheartedly!
Freedom to choose and live the way you want to is the reason why I choose to become an entrepreneur and investor instead of working in traditional Corporate America. It's the reason I started my own company to invest in real estate. I was tired of not getting paid what I thought I was worth. I was tired of not having any free time because I needed to work long hours for a living. I forgot about my hobbies and how to enjoy life because I had to work. I did not want to be subsidizing other employees who were underperforming to prevent myself from get laid off. Beginning the journey as an entrepreneur and investor, I knew my income would suffer for 2-5 years. But it was a sacrifice I was willing to make to be free and to have choices in life. 6 years later, I do not regret one second for leaving the traditional world behind. Perhaps the same could be said about the voters for Brexit and their future as well.
Negatives for leaving:
Positives for leaving:
In summary, Brexit will have short-term consequences that are negative for investors who are short-term thinkers. It's great for people who believe freedom is more important than money and want choices. Big government and labor unions have slowly squeezed away our rights away. The people have spoken. Now-a-day, people are so soft when it comes to words, that we are slowly losing our freedom of speech.
What's To Come Next After Brexit?
Under Article 50, a two-year notice is required to officially leave the EU. During this period is where the boring negotiations and agreements must take place. It could take up to 4 years according to PWC estimates before the UK can officially leave EU for good.
Given anything can happen in 2-4 years, there's a good chance that UK could actually stay in EU if things get really bad and people decide to stay instead. There could be significant investment opportunities between now and 2019 if the market continues to sell off.
Idiots say to buy the dip but that's short-term thinking. Seldom do markets reverse course after only one day of correction. This is just the beginning. What investors need to think about is what Germany will do. As Germany subsidizes the PIGS (Portugal, Poland, Italy, Greece, & Spain) much more than UK ever did. Other counties like France could also think about leaving as well. And now we have a potential domino effect that keeps falling.
It's time to review your money blueprint during this uncertain times ahead.
What's Your Money Blueprint?
Investors of Tuna Investment Group has known that since 2015, I have started to become bearish in my outlook for the stock market and real estate market here in United States. Deal-flow has become harder as many deals don't make sense from a cash-flow perspective. Most deals are now speculative and require the flippers mentality (capital gain vs cash-flow). It's simply too risky for my taste which is why I have been bearish as of late.
I've been aggressively saving money and building a Noah Arc to take advantage of the next buying opportunities due to a downturn. Taking advantage of this low-interest environment has been another priority. One should look to refinance, get lower loan's interest, and even renegotiate their credit cards' interest rates. Paying down debt has been another huge goal of mine, whether thats paying back bank's loans or investor's capital. I've been reading and studying a lot more to learn many new things. Knowledge opens more opportunities and doors because you're able to recognize it. I've been working on new income streams so I can save more, and also diversify my income for the bad times coming.
The good times are over. Unemployment will rise. Valuations will come down. Robots will replace jobs in the near future. Technology will continue to disrupt jobs. We must do our best to optimize our existing income streams and create new income streams as we can. And build a huge saving nest or have a group of investors who can help you buy many opportunities as they present themselves!
QUICK BLACK FRIDAY 6-24-2016 STATS