Trusting What You Know Over The Machine

TruePoint Capital

If you’ve ever bought a car, furniture, or anything else involving a salesman, you’ve probably come across this common sales tactic. The salesperson will assume you’re buying and present you with two options and then ask you which option you’d like to go with. In your head, you’re thinking, “I want to explore other options at other stores,” but some people fall for this tactic. It’s a manipulative sales tactic that works on many people.

Many people don’t realize it, but Wall Street uses the same manipulative sales tactic. They offer you two options – stocks and fixed-income products – and assume you will usually go with one or the other. And most investors do. They’ll sell the hell out of stocks when stocks are going well. When stocks are not going well, they’ll turn your attention to fixed-income products.

Case in point. Wall Street has been taking a beating this year, and inflation is the culprit. Investors are jittery as the Fed keeps hiking interest rates but with little to no effect. Inflation hit 8.2% in September, down slightly from the 40-year high of 9.1% in July. So, even as the economy slows down, high prices continue to rage. Stocks have suffered as a result of all this uncertainty. Year-to-date, the Dow is down more than 18%.

So as stocks have suffered, what has Wall Street been touting lately? Fixed income products.

“How to earn 5% risk-free while you wait for the market to recover, according to Blackrock’s fixed-income CIO.”

Blackrock is a big cog in the Wall Street machine. A public hedge and investment fund, Blackrock is now advocating their fixed income products and will probably sell a ton of those products to investors because investors have been manipulated into believing for so long that there are only two investment options: stocks and fixed income. Nobody on Wall Street ever gets real with investors, though. Sure, the fixed-income product may pay 5%, but with inflation running at 8.2%, a return of 5% nets a negative return of -3.2% per year.

Blackrock is just one player in the Wall Street machine looking to soak investor cash. You have politicians, media outlets, cable talking heads on CNBC and Bloomberg, YouTubers, bloggers, social media influencers, economists, analysts, advisors, brokers, you name it. Everyone wants a piece of the pie.

​​Is this who you want to trust with your wealth?

Don’t let Wall Street convince you that there are only two investment options. There are other options – better options, but the first step to break away from the Wall Street machine is to take a deep breath and step back. Just observe what you see locally. If you do, you’ll notice something happening across the country.

I have been paying attention locally, and rents are rising. I observe two phenomena. I see those concerned about the economy and their financial prospects downsizing and moving into more affordable housing. I also observe people with money deferring home ownership for nicer apartments because they’re not ready to lay down roots. But no matter the class of apartments, I see rents rising – at rates higher than inflation.

Another Wall Street tactic is to confuse you into submission. By using distraction and confusion about alternative assets like real estate, the investing public sticks with what they’re familiar with in stocks and bonds. Many investors have no idea how the Fed raising interest rates or this and that economic metric or the latest buzz from social media and talking heads affect their investments. Still, they’ll go along because it’s the easiest thing to do.

So when Wall Street tries to confuse you with smoke and mirrors, take a step back and rely on your instincts. You may not understand Wall Street, but doesn’t real estate, apartments, and rent make sense? You see more and more apartments being built and more and more people moving into apartments. Doesn’t it make sense to put your money into something you understand and see a real need for?

One of the basic investment tenets Warren Buffett lives and swears by is to invest in what you know. Most investors on Wall Street don’t even know what they’re investing in half the time. They know that someone on Wall Street and social media recommended it. Investing in what you know makes complete common sense. When you invest in something you know, the seller can’t confuse or manipulate you. You can see through the bull.

If apartments and real estate make sense to you, maybe you should consider this other option not presented by Wall Street. If you would like to consider this third option, complete this form to find out about our upcoming investments. They may be investments you can understand.

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