• Peter Ettro

As the stock market tumbles we’re reminded of the importance of portfolio diversification.

Stocks fell in volatile trading this Thursday, a day after the major indexes suffered steep losses sparked by higher rates and a sell-off in tech shares.

With more massive facebook data breaches, Google shutting down it’s comprised Google+ network and intense backlash toward intel’s processor marketing practices, tech shares took a large hit and will continue to suffer while investors reevaluate their long term value and positions.

Fears of rising borrowing costs, increasing rates and international markets crashing, when the global economy worsens, the US is not immune to its effects. 

  • Asia-Pacific stocks saw sharp declines by the region's market close, while European shares tumbled.

  • Turkey has followed inflationary policies of low interest rates, high borrow, and high growth. Now, the currency is being sold heavily out of fear.

  • Argentina has seen its currency depreciate significantly due to high inflation, high government deficits, and a large current account balance.

  • Brazil is teetering on its own unique financial crisis as the government runs high deficits while unemployment and inflation remain high; the real has been sold heavily.

  • Surprisingly, this bodes well for the US equity markets; the Fed will slow interest rate increases.

Real estate most likely will not sidestep an entire bear market, but it can definitely benefit investors during a downturn in most scenarios. If a bear market coincides with a period of a high inflation like it did in the 70s, real estate is  a good bet. Bonds, which most people use as a hedge against a bear market, performed very poorly during the 70s. 

Having a diversified investment portfolio, especially in real estate assets, could help protect the value of your investment when the stock market tumbles or international markets crash. Ettro Capital offers the simplest way to diversify your portfolio and invest in real estate. Our opportunity fund invests into multiple real estate projects in the Pacific Northwest and is open to accredited investors only. You can learn more about our Fund by clicking here or if you would like more information, please don’t hesitate to contact us.

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