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  • Tim
    replied
    The problems aren’t new. WWII, Korean War, Vietnam, high inflation, contractions, recessions, recoveries.
    If you acquaintance was diversified through today, they would be sitting pretty. The BEST part of real estate is it is so time consuming to liquidate. Keeps the knee jerk reactions to a minimum.

    Leave a comment:


  • CordMcNally
    replied


    What’s the risk management strategy – just suck up the market losses of a looming recession?
    Click to expand...


    There's almost always a "looming recession".

    Leave a comment:


  • EntrepreneurMD
    replied




    Please consider building gradually a position in the broad index funds.
    Click to expand...


    With world economic growth slowing and spreading contagion into the US markets, contraction in some sectors (ie. manufacturing), the escalating trade war and business uncertainty, treasury yield inversion and collapse, Brexit, Eurozone weakness, 18 months of essentially no real market returns, weakening oil demand, gold rising, other leading indicators, it's an interesting time to be recommending the stock market.

    What's the risk management strategy - just suck up the market losses of a looming recession?

    Insinuating the volatility in real estate is anywhere near that of the stock market is disingenuous, especially right now. Far more confident in my real estate and personal business holdings than the markets. That's why the physician business owners in our position have parallel strategy. It's a safer, more solid formula.

    His acquaintance would have fared much better if he opened CD's 10 years into a bull run, not diversifying risk assets in 2007. We shall see the timing and magnitude of the next recession.

    Leave a comment:


  • Lordosis
    replied


    Or maybe they figure out a way for diabetics and hypertensives to grow new kidneys and dialysis becomes a thing of the past but I think that’s a few more years down the line.
    Click to expand...


    You never Know.

    https://youtu.be/Ssq8wHAx4nE

    Leave a comment:


  • Ghetto
    replied




    “Commercial real estate does provide some protection against the ups and downs with long term rental agreements (5-10 years).”

    By suggesting diversification, your response points out a false sense of security due to one building and one tenant. Both strip shopping centers and large mega malls and professional buildings can and do have problems. Some national, some local and some regional.
    Same with individual stocks or bonds.

    Merely suggesting not putting all your eggs in one basket. Your acquaintance would have faired much better if he had diversified. Holding all asset classes and an index like S&P 500 or Total Market would decrease your risk. If you are risk adverse, diversification is your friend. Volatility is is not risk. Please consider building gradually a position in the broad index funds. Consider a plan and stick with it. I am glad you building worked out.
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    True, there are no investments without risk. My building is half occupied by one tenant (dialysis center). It is low risk as it is a very nice building and the sole location in my city’s medical center. It is very busy and their buildout and equipment cost over a million dollars. They could walk away from it before their options are up (15 more years) but I doubt it. Or maybe they figure out a way for diabetics and hypertensives to grow new kidneys and dialysis becomes a thing of the past but I think that’s a few more years down the line.

    Leave a comment:


  • Tim
    replied
    “I was reminded of this when reading about Jeffrey Epstein. Even financial wizard types like him lost a lot on that one stock alone.”

    Wizard? Wexner got taken .
    “Little is known about where Epstein's fortune comes from. Epstein rose to prominence as the money manager of L Brands CEO Les Wexner, Vanity Fair reported in a lengthy profile in 2011. Unlike other well-known financiers, Epstein kept the client list and investments of his US Virgin Islands-based firm — in addition to his own personal net worth — confidential.”

    Relationships of all types were Epstein’s wheelhouse. Enough said.

    Leave a comment:


  • Tim
    replied
    “Commercial real estate does provide some protection against the ups and downs with long term rental agreements (5-10 years).”

    By suggesting diversification, your response points out a false sense of security due to one building and one tenant. Both strip shopping centers and large mega malls and professional buildings can and do have problems. Some national, some local and some regional.
    Same with individual stocks or bonds.

    Merely suggesting not putting all your eggs in one basket. Your acquaintance would have faired much better if he had diversified. Holding all asset classes and an index like S&P 500 or Total Market would decrease your risk. If you are risk adverse, diversification is your friend. Volatility is is not risk. Please consider building gradually a position in the broad index funds. Consider a plan and stick with it. I am glad you building worked out.

    Leave a comment:


  • fatlittlepig
    replied










    Both of these guys were nearing retirement age. They lost money that neither could afford to lose as they didn’t have a decade to wait to get it back. Some of the stock one owned ended up completely worthless as companies went out of business (or has that eventuality never crossed your mind?).

    I’m not defending their investment strategies. I do think that people don’t intend to hold risky stocks that close to retirement but the constant drumbeat about market investing in the media and culture at large gets the better of some people’s greed and makes them do stupid things.
    Click to expand…


    Safe to say that the stocks I own are not likely to go to zero.
    Click to expand…


    That’s what all the Bear Stearns stockholders thought. Huge financial company founded in 1923 and survived the Great Depression to become a global financial behemoth. Stock reached $170 in 2007 and was sold for <$10 before it went away. I was reminded of this when reading about Jeffrey Epstein. Even financial wizard types like him lost a lot on that one stock alone.

    For your sake I hope you’re more astute than you are humble.
    Click to expand...


    I have a fairly hefty collection of stocks and an even more hefty portfolio of index funds. If any one stock went to zero it would be OK.

    Leave a comment:


  • Ghetto
    replied







    So now I own two commercial real estate properties (21k sq ft total), a rent house and two investment vacant lots on my street, a large percentage of an ambulatory surgery center that I developed, and a medical practice.
    Click to expand…


    Could you please give us advices or share your experiences on how did you get in real estate properties?
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    Yes. I started my medical practice in the early 2000s. I rented space for several years.

    I had a leg up because my father had built his own home twice and then some apartments which he later sold. He encouraged me to consider investing in my own office space. So after a few years I purchased some vacant land on the periphery of the medical center in my city. I hired an architect and built a medical office building (16k sq feet) which I ended up occupying and putting the rest up for lease. Fortunately Davita dialysis leased the balance of the building and they’ve been tenants for 10 years and just re-upped for another 5 years (they have an additional two 5 year options as well). It was a ballsy move and maybe too risky but it worked out.

    So I think family advice had a lot to do with the direction of my investments. My father owns a retail strip center and my father in law owns two of them. So kind of the family business if you will.

    Leave a comment:


  • Ghetto
    replied







    Both of these guys were nearing retirement age. They lost money that neither could afford to lose as they didn’t have a decade to wait to get it back. Some of the stock one owned ended up completely worthless as companies went out of business (or has that eventuality never crossed your mind?).

    I’m not defending their investment strategies. I do think that people don’t intend to hold risky stocks that close to retirement but the constant drumbeat about market investing in the media and culture at large gets the better of some people’s greed and makes them do stupid things.
    Click to expand…


    Safe to say that the stocks I own are not likely to go to zero.
    Click to expand...


    That’s what all the Bear Stearns stockholders thought. Huge financial company founded in 1923 and survived the Great Depression to become a global financial behemoth. Stock reached $170 in 2007 and was sold for <$10 before it went away. I was reminded of this when reading about Jeffrey Epstein. Even financial wizard types like him lost a lot on that one stock alone.

    For your sake I hope you’re more astute than you are humble.

    Leave a comment:


  • fatlittlepig
    replied




    Both of these guys were nearing retirement age. They lost money that neither could afford to lose as they didn’t have a decade to wait to get it back. Some of the stock one owned ended up completely worthless as companies went out of business (or has that eventuality never crossed your mind?).

    I’m not defending their investment strategies. I do think that people don’t intend to hold risky stocks that close to retirement but the constant drumbeat about market investing in the media and culture at large gets the better of some people’s greed and makes them do stupid things.
    Click to expand...


    Safe to say that the stocks I own are not likely to go to zero.

    Leave a comment:


  • Ghetto
    replied
    I hear you re: diversification. I’ve had people tell me to diversify from real estate. Usually those people are 100% in the stock market. Commercial real estate does provide some protection against the ups and downs with long term rental agreements (5-10 years).

    Leave a comment:


  • Infinity
    replied


    So now I own two commercial real estate properties (21k sq ft total), a rent house and two investment vacant lots on my street, a large percentage of an ambulatory surgery center that I developed, and a medical practice.
    Click to expand...


    Could you please give us advices or share your experiences on how did you get in real estate properties?

    Leave a comment:


  • Tim
    replied
    “the constant drumbeat about market investing in the media and culture at large gets the better of some people’s greed and makes them do stupid things.”

    Just as they should not invest from a “political “ or “emotional “ standpoint, one should not choose an investment based on fear or hype.

    Stocks aren’t for everyone, nor should they be. Real estate is not for everyone either.

    Know what you own and consider the risk before even considering the returns. Media and culture and acquaintances should never be an excuse. One makes their own decisions. My suggestion with all due respect is to consider diversifying outside of real estate. Real estate is cyclical as well, it might keep you investments balanced out. Then again, maybe not.

    Leave a comment:


  • Ghetto
    replied
    Both of these guys were nearing retirement age. They lost money that neither could afford to lose as they didn’t have a decade to wait to get it back. Some of the stock one owned ended up completely worthless as companies went out of business (or has that eventuality never crossed your mind?).

    I’m not defending their investment strategies. I do think that people don’t intend to hold risky stocks that close to retirement but the constant drumbeat about market investing in the media and culture at large gets the better of some people’s greed and makes them do stupid things.

    Leave a comment:

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