Have you checked your stock portfolio lately?
If so, you’ve probably noticed there’s some heightened volatility in the markets. (In other words, you’ve probably seen more red numbers on your screen than you have in a while.)
I was reviewing some research from commercial real estate brokerage Marcus & Millichap earlier this week and came across something surprising. Their Economic Policy Uncertainty Index is currently at its highest level ever outside of the pandemic:
Yes, you read that right – even higher than during the 2008 Great Financial Crisis.
So what's going on?
We're experiencing a significant shift in the economic landscape.
Version 2.0 of the Trump administration is implementing substantial policy changes – from tariffs creating potential trade wars to DOGE’s government cuts and their downstream impacts. And as the initial euphoria around the administration change starts to wear off, investors are beginning to ask some tough questions.
Was the economy actually as strong as we thought? Or was it being propped up by government jobs and spending that are now on the chopping block?
Wall Street's Predictable Response
True to form, Wall Street is doing what it always does in the face of uncertainty: sell first and ask questions later.
The VIX (market volatility index) has spiked, and we've seen a notable drop in stock prices over the past couple of weeks. But here's the thing – this is completely normal behavior whenever uncertainty rears its head.
And I suspect this uncertainty isn't going away anytime soon.
The administration has made it crystal clear that the stock market isn't their barometer of success. In fact, several officials, including Trump himself, have explicitly stated they're not really looking at the stock market. (Whether that's true or not is another discussion.)
But at least based on their messaging, they seem perfectly willing to let the market find its own level, even if that means some downward pressure in the short term.
Preparing for Continued Volatility
I think it's reasonable to prepare for volatility through most of 2025, especially if you're heavily invested in stocks. There will be big down days – and also some significant up days. That's just the nature of uncertainty.
But this is where it gets interesting for us as real estate investors.
Times of uncertainty tend to drive capital toward tangible, necessity-based investments.
When markets get choppy, fundamentals matter more than sentiment. And I'd be hard-pressed to find a place with better forward-looking fundamentals than rental real estate.
Our Investment Thesis Remains Intact
Despite all the negative economic noise, our core investment thesis remains solid:
The housing shortage isn't going anywhere. We still have a massive supply-demand imbalance. While some (myself included) have questioned whether large-scale deportations might impact rental demand, we haven't seen evidence of that yet. The natural population growth combined with a severe lack of new supply means we're still headed for apartment shortages starting later this year and into 2026.
Energy investments remain strong. Despite the previous administration's push against oil and gas, these resources continue to be necessary for a functioning first-world economy, and are strategic assets for the US. Plus, they provide investors with solid cash flow and excellent tax benefits.
Private credit opportunities are expanding. Banks become even more conservative during uncertain times, which only strengthens our thesis that good deals with solid operators need alternative funding sources. Our Private Commercial Credit Fund fills that middle part of the capital stack for these deals, while providing solid monthly cash flow to our investors.
None of this market uncertainty changes our approach. We remain bullish on all our investment theses.
From Paper to Real Assets
If you're feeling unsettled watching your portfolio balance dip, remember this: after periods of long growth, people tend to forget that volatility exists and that stock prices can actually go down.
This uncertainty presents a perfect opportunity to reassess your portfolio. Real assets – not paper investments like stocks and ETFs – are what truly build and preserve wealth over the long term.
The Bottom Line
I've said it before, and I'll say it again: You can't eat equity.
When stock prices drop, that's bad for your balance sheet. But if you're invested in cash-flowing assets like rental real estate, you still have money coming in every month. Regardless of what the S&P 500 is doing, renters continue to pay rent – everyone still needs a roof over their head.
So while others are refreshing their brokerage accounts and losing sleep over market volatility, we're focused on providing our investors with consistent cash flow and helping them build wealth that withstands economic uncertainty.
Now might be the perfect time to join our investors who have moved some of their paper wealth into real assets – before the next wave of volatility hits.