Rotation Into “Real Assets” Is Well Under Way

Following a protracted downtrend for stocks that have seen declines for the past ten out of eleven weeks, bargain hunters showed up Tuesday as the S&P 500 came within a few percentage points of testing its 200-week moving average. This long-term trend line has proven to be a legitimate line in the sand that was last challenged in March 2020 when the COVID-19 pandemic broke out across the world.

With the market in disarray and investors aggressively searching for the right asset mix going forward, I think it’s a good time to check in with the world’s largest hedge fund manager, Ray Dalio of Bridgewater Capital and see where he is putting his money.

In a live CNBC interview from the World Economic Forum in Davos, Switzerland, last month, Ray Dalio made it clear that he still believes that “cash is trash.” He went on to elaborate: “of course cash is still trash … you know how fast you are losing buying power in cash?” To which he added: “equities are trashier … the question is what’s going to get you a real return? And so, we’ve shifted into an environment where assets that do well, almost like in the ‘70s, and those types of things, real assets, real return assets in various ways are the best investments.” Perhaps some of the best examples of real assets include assets like commodities and real estate, which make up some of Bridgewater’s top holdings according to its filings with the U.S. Securities and Exchange Commission.

Hard assets. Real assets. I find this statement by Dailo very reassuring, especially for those investing in real assets, like Belpointe PREP, LLC (NYSE American: “OZ”) which is positioned squarely in the real estate subsector—developing and acquiring multi-family residential Class A income-producing properties.

In my opinion, this also speaks to why Belpointe PREP’s (NYSE American: “OZ”) Class A units are trading so close to their net asset value/IPO price of $100 per unit. I think investors that are looking to invest in real assets are ready for liquid assets that include tax deferral features as well as the potential for long-term growth and income. And I think it’s this combination of tax-sheltered incentives and capital appreciation prospects in an asset class that has been through the inflation litmus test of late that makes the market for OZ Class A units attractive.

Belpointe PREP (NYSE American: “OZ”) is the first and thus far the only publicly listed qualified opportunity fund (“QOF”) and it requires no paperwork to invest. Belpointe PREP provides investors with the ability to pair off 2021 year-end gains (as well as year-to-date 2022 gains), using a 180-day look-back window, and reinvest those capital gains to defer taxes, in addition to offering investors an opportunity for growth and income, out to December 31, 2026, where all capital appreciation and the majority of pass-through income may be tax-free.

In addition, Belpointe PREP’s management team is actively seeking to acquire other QOFs that have stabilized their properties, where there are some clear benefits to acquiring seasoned properties in lieu of new construction with all its attendant risks. Our acquisition team is actively looking for sellers of properties within Opportunity Zones (“OZs”). Belpointe PREP has cash and currency in the form of its Class A units “OZ” that provide the kind of liquidity that some selling parties may desire.

And the terms of investing in QOFs might just be extended. The two co-authors of the legislation that created OZs—Senators Cory Booker (D-NJ) and Tim Scott (R-SC)—are trying to make investing in QOFs even more attractive for investors. As of early April, they introduced a bill called the Opportunity Zones Transparency, Extension, and Improvement Act, designed to enhance the spirit of the original legislation and the benefits for investors seeking to invest in QOFs. The bill has strong bipartisan support and is currently in the committee stage in both the Senate and House.

Cody H. Laidlaw
Editor-in-Chief
Belpointe OZ
255 Glenville Road
Greenwich, CT 06831
T: (203) 883-1944
E: IR@belpointeoz.com

Disclosure: Cody H. Laidlaw is the Chief Investor Relations Officer. Cody is also an investment advisor representative with Seaside Advisory Services, Inc. (d/b/a Seaside Financial & Insurance Services), a SEC registered investment adviser offering advisory accounts and services, and holds a long position in Belpointe PREP, LLC’s Class A units.

Important Information and Qualifications

Belpointe PREP, LLC (“Belpointe PREP”) has filed a registration statement (including a prospectus) with the U.S. Securities and Exchange Commission (SEC) for the offer and sale of up to $750,000,000 of Class A units representing limited liability interests in Belpointe PREP. You should read Belpointe PREP’s most recent prospectus and the other documents that it has filed with the SEC for more complete information about Belpointe PREP and the offering

Investing in Belpointe PREP’s Class A units involves a high degree of risk, including a complete loss of investment. Prior to making an investment decision, you should carefully consider Belpointe PREP’s investment objectives and strategy, risk factors, fees and expenses and any tax consequences that may results from an investment in Belpointe PREP’s Class A units. To view Belpointe PREP’s most recent prospectus containing this and other important information visit sec.gov or belpointeoz.com. Alternatively, you may request Belpointe PREP send you the prospectus by calling (203) 883-1944 or emailing claidlaw@belpointe.com. Read the prospectus in its entirety before making an investment decision.

This communication, including any links embedded herein, may not be distributed in any jurisdiction where it is unlawful to do so. Nothing in this communication is or should be construed as an offer to sell or solicitation of an offer to buy Belpointe PREP’s Class A units in any jurisdiction where it is unlawful to do so.

Neither Belpointe PREP nor any of its affiliates provide investment or tax advice and do not represent in any manner that the outcomes described herein will result in any particular tax consequence. Prospective investors should consult their own investment and tax advisers concerning the U.S. federal, state and local income tax consequences, as well as any tax consequences under the laws of any other taxing jurisdiction, in relation to their personal tax circumstances, which may vary for prospective investors in different tax situations.

This communication may contain estimates, projections and other forward-looking statements, typically identified by words and phrases such as “anticipate,” “estimate,” “believe,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “seek,” “should,” “will,” “would,” “expect,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target” or the negative of such words and other comparable terminology. However, the absence of these words does not mean that a statement is not forward-looking. Any forward-looking statements expressing an expectation or belief as to future events is expressed in good faith and believed to be reasonable at the time such forward-looking statement is made. However, these statements are not guarantees of future events and involve risks, uncertainties and other factors beyond Belpointe PREP’s control. Therefore, we caution you against relying on any of these forward-looking statements. Actual outcomes and results may differ materially from what is expressed in any forward-looking statement. Except as required by applicable law, including federal securities laws, Belpointe PREP does not intend to update any of the forward-looking statements to conform them to actual results or revised expectations.

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