Inflation and interest rate hikes made for a difficult 2022. A recession may be inevitable in 2023. As a business owner or an investor, how do you mitigate that? Do you stop allocating all together? How do you earn positive returns
In this conversation, join Pasha Esfandiary and Cody Littlewood as they chat with Kevin Gray of Veracity Capital and formerly Goldman Sachs about what 2023 can hold and some trends you need to watch out for in this new year. Especially if you’re a first-generation wealth creator, learn how you can begin creating a legacy for your family outside of your main business or investment class!
Here are some powerful takeaways from today’s conversation:
Episode Highlights:
[11:09] The Biggest Weakness of Business Owners
Many business owners invest everything into their business because that’s how they’ve grown it. They throw everything into their business and they don’t invest elsewhere at all. But the right investment advisor and wealth manager can allow you to focus on what you’re great at while they work on your behalf at what they’re great at. Utilizing outside firms to handle a chunk of your capital can take the emotion out of it, give you access to hedge funds and alternatives you wouldn’t otherwise have, and boost your returns considerably.
[17:04] The Fed
The role of the Fed right now is to slow down the economy. And it’s working, and they will do that until interest rates get, or inflation gets, near about 2%. And so, until they get to that point, they're going to attempt to slow down the economy in order to get there.
[21:40] Where to Focus Your Allocations This Year
Because of the volatility, Kevin warns that you have to be prepared, and particularly focus on credit markets in the new year. Whether it’s private lending, high-yield bonds, or international bonds, the performance is going to be in the credit space since interest rates are very high and they're moving up comparatively over the last decade. Hedge funds are also going to be beneficial if you add them to your portfolio even though they’ve had a muted return during this enormously long bull market. There’s also a great opportunity in real estate with conservative operators and good markets.
[48:11] What the Future Holds
We had the safest currency or the safest reserve in the world. At some point, it can look like that’s no longer the case given our debt burden. But it's all relative. As the U.S. dollar quits running away and begins to weeken, that's when the international market starts looking really good again. Compared to the rest of the world, if the country can keep up, everything is going to be rosy. Equities don't go away, only reduced. Kevin is looking more and more at the private space. And if your money's locked up, and you're getting close to nothing on it anyway, private equity and other illiquid investments may be a great opportunity going forward.
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