Foreign trade disputes, geopolitical tensions, and global trade wars cause market turmoil. Stock market values fluctuate. Every few years, the market will experience a correction or a crash. It can make you feel uneasy. Also, it can make you wonder if you should take specific actions to combat or otherwise deal with market volatility. So, how prepared are you in a volatile market? Focus on some real estate investing moves is something you can do if you are concerned about market volatility.
Is a bear market on the horizon? For months, experts and investors have been debating this question. Given the market’s cyclical nature, expecting the current bull market to last forever is unrealistic. What is unknown is when the bear will dig its claws in. While hindsight is 20/20, foresight is just as critical. Investments made now could pay off once a bear market hits. Stocks are on a roller coaster ride. Bond yields are bleak in the current rate environment. But, real estate takes center stage.
Money always had to unconventionally work extra to generate a return. Traditional stock and bond strategies get used by institutional investors to meet investment objectives. However, the economic environments are uncertain and this can be tough. The present levels of uncertainty have gotten unparalleled, complicating investment decisions. Thus, many investors are becoming more interested in investing in other investment vehicles. Alternative asset classes, such as real estate and agriculture, have popped up to safeguard you from an ambiguous economic climate. Solution investment vehicles like real estate, are more appealing because they are less affected by cyclical changes. Economic instability, volatility, and interest rates are all beyond the control of a person. However, real estate has the potential to yield profits plus mitigate risk. Assetmonk, for example, is one of the reputable real estate investment companies that help choose stable and high-quality properties. It also ensures a smooth property selection process and a trouble-free experience for all investors. Asset-backed investments get provided by Assetmonk. It means that your investment is secure even if an unforeseen event occurs.
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What is real estate investment?
Real estate investment is buying property to generate passive income as opposed to residing. Real estate investment is a building or land. They are not movable, but they can be transferred. Also, many types of real estate investment exist, of which commercial and residential properties are some. The real estate consists of a home, such as a single or multiplex, and gets used for residing. It can get resold. A complex’s office buildings or properties get divided into units. They get leased and run a variety of businesses. As a result, they are commercial properties. Real estate investment pays off in the long term. If performed correctly, it yields substantial profits. In contrast to other assets, real estate gets unaffected by inflation. Instead, its value and income rise alongside each other with the economy’s expansion.
Why invest in real estate?
Our homes are frequently our best investments. Properties have always served as solid inflation hedges. Furthermore, in most cases, real estate values serve as a healthy check against stock-market volatility because property prices fluctuate less than trendy equities.
Still, with many countries’ housing markets still hot, real estate may be out of reach for average investors. That’s why real estate investment trusts, or REITs, which specialize in various types of properties ranging from apartments to manufactured homes to warehouses, are recommended by experts as a way to get some property exposure in a portfolio.
Financial markets took a wild ride in 2022 with drastic ups and downs in the values of stock and crypto. The threat of inflation looming over the broader US economy and Russia’s invasion of Ukraine has caused acute geopolitical tensions. It has also caused short-term stock market drops. While investors have always relied on residential real estate as a firm foundation in any well-balanced portfolio, the current volatile environment may be creating a special incentive for wealthy buyers to shift more of their holdings into real estate. Property can be a safe place to invest in the face of high inflation, a volatile stock market, and war drums.
How is real estate investment a zero market volatility asset?
Correlation is a finance statistical measure of how far two investments or assets move about one another. They are said to be highly correlated if they move up or down. Correlation is low or even negatively correlated if one moves down while the other remains stable or moves up. J.P. Morgan Asset Management compared the past performance of commercial real estate to that of stocks and bonds in their report “Real estate: Alternative no longer.” J.P. Morgan described the private real estate investment universe as “too significant to ignore.” Real estate traditionally has produced a performance between equity and bonds. But with a bond-like yield and lower volatility than equity. Unlike bonds, which pay a fixed coupon rate, real estate’s low volatility cash flow supports stable returns with payouts that can grow in line with cash flow. According to J.P. Morgan, real estate historically has provided a foundation for low correlation to equity performance and a strategic opportunity for portfolio diversification.
But, where to better invest in real estate in India?
We have all wondered where to invest in Indian real estate for better returns. Residential or commercial real estate investing? Assetmonk to the rescue.
Commercial real estate has a low correlation to the financial or stock market and can protect your portfolio from economic swings. CRE is a physical and stable asset contrary to fluctuating investment instruments like stocks. Outpacing the market is also exceptionally tough. Most people are afraid to invest in commercial real estate. They are, however, not difficult to create with the aid of real estate investment platforms. For instance, Assetmonk is a reliable real estate investment portal that helps choose high-grade yet stable properties for you. It also guarantees that all investors have a sleek real estate selection procedure and a hassle-free experience. Are you excited to start much?
But, we all know and have gotten told that an investment in commercial real estate gets expensive. That requires you to have deep pockets. Well, you do not need to. Not anymore. But how is that possible? All this is made possible through fractional ownership. Fractional ownership also makes millennials investing in real estate with a small budget accessible.
So, what exactly is this fractional ownership?
The availability of fractional ownership has made commercial real estate investment more accessible to the general public. Assetmonk, for example, customizes CRE investment opportunities beginning at Rs 10 lacs, based on individual goals. These can range from capital appreciation to passive income.
An event where a guest brings and shares a distinctive, often handmade, meal of food is called a potluck. Analogously, fractional ownership allows you have ownership of a real estate property. But, that can only be made possible through a group of people pooling funds and owning the property in parts. Also, investors will divvy up the profits earned by this property according to the percentage of their investment. You can now broaden your portfolio by possessing a stake in commercial workspaces, depots, driveways, and manufacturing floors. All made possible through fractional ownership.
Commercial real estate is a tangible asset that generates steady returns. It also does not easily fluctuate. Thus, it qualifies as a risk-free investment. Furthermore, fractional ownership investment is not a long-term commitment and does not have a locked-in period. Thus, investors can exit anytime. The most critical aspect of property investment is not simply investing and managing the asset. It is also about getting away.
You can never perfect the timing, whether all signs point to a bull or bear market right now. Meanwhile, real estate investments can help smooth out the peaks and valleys in your portfolio, generating an increasing annual passive income stream that you can retire on and use to secure your financial future.
Showcase IDX is a great tool for finding real estate. If you want to purchase, sell, or rent a home, this is a great tool to have. You can easily add your mls idx feed to your site with Showcase IDX.
