Where to invest in 2022!

Oh my goodness, the ball dropped and it is 2022! I have to confess, I turned in around 10pm, so I wasn't awake to witness all of the celebration.

So now that it's a brand new year, where the heck do I invest?  

The truth is, investments don't operate on a calendar year basis.  The Dow Jones Industrial Average doesn't have a conscience.  It doesn't know what "it" did last year or the year before.  Neither does the rental property you have been looking at.  A deal is a deal, and it matters not what day on the calendar you find it on.

What DOES matter are things currently happening in our economy:

- Interest rates are almost sure to rise

- Inflation will likely continue to accelerate for some time, as the economy is still absorbing the $ trillions in helicopter money issued by Uncle Sam over the last 2 years.

- RE buyers are buying at the market top.  Little inventory, lack of new supply, and lower yields.

All of this means be careful.  If you are buying at the top of the market, and your numbers will no longer work if your rents drop by 25%, or the value of your property drops 25%, you are picking the wrong property.  There are many folks buying questionable deals, and there is plenty of pain straight ahead for those folks.  That's just the way boom and bust cycles work.

If you want consistent, predictable yields, consider other investments, too.  As CAP rates began trending below 8%, I started buying shares of Phillip Morris (MO).  This is a company with 52 years of consecutive dividends, sporting a yield of almost 8 percent.  And people will never stop smoking.

Ignore the calendar and make good investment decisions.  That same advice will hold true in 365 days.   

Happy New Year!