Our government is in chaos right now. If it seems lost and lacking leadership, it’s because it is. A confused President is not our only problem. There’s confusion on both sides of the aisle. For the first time in our country’s history, the Speaker of the House was voted out of his job. This happened earlier this month when Speaker Kevin McCarthy was ousted by a Republican majority. It seems kicking out the presiding Speaker was the easy part, as Republicans have yet to come to an agreement on his replacement.
The recent political problems are just the tip of the iceberg. Witch hunts throughout the political landscape are now the standard as political parties leverage local and federal politicians and courts that lean one way to punish or impede members of the other political party. The level of political bravado has reached fevered heights. If a political party doesn’t want to face an opponent in the polls, why not try to put them in jail to prevent them from running?
Despite their inability to govern themselves, our political leaders still seem to find time to meddle in every aspect of our lives. They’re not afraid to regulate anything and everything to score political points.
Take crypto, for example. In recent months, the Biden administration has moved to develop cryptocurrency regulations. However, the U.S. government finds itself caught between two extremes: unwilling to actively block cryptocurrency transactions for fear of restricting a growing and potentially lucrative industry but also determined not to give up completely on policing illegal cryptocurrency payments and going after their role in the cybercrime ecosystem.
As the government has proven to balance both extremes in the past, we shouldn’t expect it to be competent in doing so going forward.
As the Fed’s move to put their sticky regulatory fingers on crypto and everything else, local and state governments are also getting in on the action. Just recently, New York City passed regulations that effectively killed the short-term rental business. Among the onerous requirements for running short-term rentals are the requirement to pay a fee and register with the city and for the owner of the rental to be in the property with the tenants during their stay.
Politicians aren’t the only ones impacting markets. You also have market manipulators with deep pockets and deep influence to contend with. Besides high-volume traders and hedge funds that are in each other’s’ pockets to manipulate and skim off retail traders’ transactions, there are market manipulators who leverage social media and fake news to fuel pump and dump schemes.
The SEC recently charged a gang of social media influencers who encouraged their followers to buy certain stocks then sell them after prices surged without telling their followers and leaving their followers holding the proverbial “bag” of losses once the markets adjusted.
Market influence doesn’t stop at the government and market levels. It also happens on Main Street where financial planners, advisors, your employer, your coworkers and even your families try to influence where to put your money.
All the influence, confusion and chaos in the markets is enough to drive investors crazy. Are you trusting your finances and your chances at wealth to these market forces? Smart investors don’t. They step away from all the commotion to put their money in places insulated from all of these market drivers. They seek out private investments in private markets.
We have personally insulated our portfolios from market chaos through private investments. We encourage private investments like investments in private companies (i.e., private equity or private debt) and in private real estate through developments, commercial real estate investments and passive investments.
Why private investments?
The most obvious reason is protection from broader market manipulation. Because private investments are not traded on public markets like stocks and crypto, they’re illiquid. Buying and selling real estate or equity in a private company doesn’t happen in an instant and doesn’t even happen overnight. These transactions require a fair amount of time that goes into prospecting, evaluating and in most cases, financing. So, while the needle of the public markets can be moved in an instant from fake news or a tweet, the private markets are insulated from such influence.
Besides being insulated from market noise and government influence, private investments offer a variety of other benefits ideal for building, growing and preserving wealth.
These benefits include:
- Above-market risk adjusted returns.
- Cash flow for reinvesting and compounding wealth.
- Intrinsic value from a tangible income-producing asset.
- Appreciation of the underlying asset.
- Hedge against inflation.
- Tax benefits.
All these benefits combine to offer investors with a viable and more appealing alternative to traditional investments for generating reliable and consistent cash flow and appreciation ideal for creating wealth.
Who are you trusting your wealth to?
Who are you letting influence your financial future? The government? High volume traders? Market manipulators? Social media influencers?
Why not take your investment capital out of the hands of the wrong parties and put it in the private markets where your wealth along with your peace of mind are insulated from market chaos?
Kyle Jones is a co-founder and Key Principal of TruePoint Capital, LLC. Kyle is responsible for the company’s strategic planning, investment decisions, asset management, and overseeing all aspects of the company’s financial activities, operations, and investor relations.
Kyle obtained a Bachelor of Science degree from Texas State University – San Marcos, where he also played Division 1 Baseball.