August 2019, I had the honor of speaking at the Captivate Conference in Las Vegas, a leading annual investment conference on topics related to wealth management strategies for high net worth families.
There were many interesting discussions that took place over the three-day event, not only about investment opportunities (more on this in a moment), but also about navigating family dynamics when it comes to managing multi-generational wealth. Some of the latter topics included:
- succession planning for the transfer of wealth from one generation to the next;
- how to raise your kids with so many advantages, and yet not spoil them;
- the family dynamics around transferring some wealth to your grown children while you are still around to see them enjoy and benefit from it;
- how to help your kids financially during the college years while also teaching them to be financially responsible for themselves; and
- how to set the expectation of how much (or how little) you will help them once they graduate.
With my oldest son now in his last year of high school, those last two topics were something that were particularly relevant to me. If any of these topics is of interest to you and your family, I’m happy to discuss and share what I learned.
Opportunities in Hard Money Lending
My own presentation at the Captivate Conference was part of “An Inside Look at How Family Offices and Investment Managers Make Allocation Decisions.” The discussion included how to structure a balanced portfolio, including both equity and debt, as well as direct and fund investments.
One of my areas of expertise and focus as a speaker at the event was investment opportunities in hard money lending. While it’s not widely known, hard money lending is a multi-billion industry that’s been around for decades and offers arguably one of the best risk-adjusted returns in the business. TideRock Financial has been working with industry specialists to bring these types of investment opportunities to our clients for over 10 years with fantastic results.
Hard money lending funds have historically delivered consistent returns with a roughly 10% yield and first trust deeds as collateral. That means the real estate behind these loans would need to fall in value by 35% in one year before you would be in danger of losing money on these investments.
If you are interested in learning more about this or other alternative investment opportunities, don’t hesitate to give me a call.
International Markets: Poised for a Comeback?
Finally, as we look ahead to the remainder of 2019, I wanted to take a moment to consider the role of international markets in a well-balanced portfolio. Modern Portfolio Theory has historically dictated that international markets make up approximately 30% of the average stock investment portfolio. In the wake of the global recession of 2008, the current number for most people right now is closer to zero.
Now may be a good time to consider slowly re-balancing this sector back into your portfolio. European Stocks versus the S&P 500 are currently at a 70-year high in terms of return deviation. Emerging markets show a similar pattern.
It is highly unusual for the US stock market to have outperformed international markets by such a large margin. Large European multi-nationals are due for some equalization. To help our clients achieve this market diversification with very low fees, TideRock Financial uses the best institutional-grade index funds that are not available to the general public.
For more details on any of these investment concepts or to discuss the market in general, please don’t hesitate to give me a call at 949-215-4872.
Wishing you the very best in these last few months of 2019!