“Dream On” Presidential Election and Rate Hike Cycle Threaten the Markets

“I know nobody knows
Where it comes and where it goes

I know it’s everybody sin
You got to lose to know how to win”

— Aerosmith

The next big worries putting pressure on the markets are the presidential election and the inevitable rise in interest rates. Some would argue that these headwinds are ultimately linked by politics. Although Republican nominee Trump may be the most unpredictable wildcard of all-time, we know from past Fortis letters pertaining to short-term volatility that “You got to lose to know how to win…” as legendary Aerosmith lead singer, Steven Tyler, would wail.

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The Apartment Boom Is Ending, Long Live the White Picket Fence

“I recommend that every man own the roof that sheltereth him and his,” Arkad says. “Nor is it beyond the ability of any well-intentioned man to own his home.” Arkad argues that “to own his own domicile and to have it a place he is proud to care for, putteth confidence in his heart and greater effort behind all his endeavors.” — “The Richest Man in Babylon”

Key Takeaways

  • There are nearly 90 million Millennials in the U.S. today. Don’t stereotype them as debt-strapped city dwellers who will never seek the suburban dream.
  • Many members of Gen Y have good incomes and are in the prime years for getting married, starting families and yes, buying suburban homes in good school districts. They just start a little later.
  • Rents have never taken up a larger of the American worker’s paycheck. Would you bet on this trend continuing?
  • We believe strongly in real estate as a long-term investment, particularly in multifamily housing.
  • Private real estate investment generates “alpha” in a tax-efficient manner and is an excellent source of income in a world of near-zero or even negative interest rates.

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