Today a legend in the business who oversees nearly $200 billion spoke with King World News about what he is doing with his own money right now in this crazy financial landscape.
Insanity In The Stock Market
August 22 (King World News) – Eric King: “Rob, obviously we still have the bubble markets in full force. When do you think the insanity in the stock market is going to end?”
Liquidity Pouring Into Stocks
Rob Arnott: “It’s driven more by liquidity — money burning a hole in people’s pockets — than by underlying fundamentals, quite clearly. Note that wherever the stimulus is most aggressive — the US — markets are most expensive. And where stimulus is not possible on a vast scale, in emerging economies, markets are relatively cheap. So as stimulus comes to an end, as it must eventually, I’m a strong believer that what must happen will happen and what cannot happen won’t happen, and it’s a wonderful guiding principal for seeing paths to the current news cycle and seeing what’s likely to happen longer-term. What can’t happen won’t happen. Stimulus can’t persist forever. But while it’s happening it sure helps earnings and props up markets, it keeps liquidity pouring into the markets. And as soon as we stop the de facto universal basic income or UBI through these stimulus checks mailed to people, the sooner the retail community will stop pouring money into the markets.”
Eric King: “Rob, what are you doing with your money right now?
Real Estate Protects Against Inflation
Rob Arnott: “I have real estate in Florida. Miami is the capital of Latin America and it sees a steady inflow of capital. I bought a waterfront home there in 2018 and by the end of 2020 I was offered a 40% premium to what I had paid for it. I did not sell for the very simple reason that I would have to turn around and buy something else. So why bother?
But real estate protects against inflation. You own it and so it’s harder for Big Brother to step in and say, ‘We want to tax you harder on your assets,’ than if you have money in stocks or bonds, which are liquid. And the public outcry on heightened taxation on real estate would be daunting for any politician. So I don’t see taxes on real estate going sky high. So I like real estate, even though it’s expensive, even though it feels a little bubbly. You also have a flood of…to hear what else legend Rob Arnott is doing with his money right now and what he thinks is next for major markets, inflation and much more CLICK HERE OR ON THE IMAGE BELOW.
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