Risk Of Market Correction On The Rise
A rough start for the stock market this week wasn’t what most investors had in mind as earnings season kicks into high gear. Selling of Treasuries across the curve may have pulled the rug out from under all 11 market sectors with the major averages taking out the lows of January 10. The yield on the benchmark 10-yr rose to 1.86% on Tuesday with a 2.0% handle looking pretty automatic at this point.
For the first time this year, there is also some increasing concern about corporate earnings for Q4 due to the ongoing supply chain chaos and the impact Omicron may have had on the economy following a dismal retail sales report for December. But the central issue among investors seems to be selling pressure in the bond market amid a growing consensus that the Fed will indeed raise rates three to four times this year and the possibility of a half-point hike as early as March in conjunction with the ending of quantitative easing.
It didn’t help that the big money center banks kicking off the reporting season saw their shares decline even as bond yields rose, citing lower fixed-income trading revenues. It signals to the market that when the financials can’t rally with rates ticking higher, then there may be more pain ahead, and that’s what seems to have Wall Street spooked.
An entire generation of asset managers may have never managed money in a rising rate, rising inflation market. The 10-year Treasury traded with a yield of 5.3% in May 2007 prior to the Great Recession of 2008-2009. Thankfully, productivity gains have been the greatest deflationary force that provided bountiful profits for the past 15 years. But even the advances in technology are no match for when there is a trifecta of inflationary forces (wage, commodity, monetary) collectively at work.
Being in the playoff season, it is pretty widely accepted that “the best offense is a good defense” – and one way of defending against inflation within one’s overall portfolio may be by diversifying into essential income-producing real estate that invests in multi-family residential properties.
In our view, during inflationary times, the stock of a real estate company investing in multi-family real estate and listed on a national securities exchange, like the NYSE American, has a bullish edge over stocks trading in most every other sector.
Belpointe PREP, LLC (NYSE American: OZ) is sharply focused on acquiring and building Class A full-featured apartment complexes in some of the most robust job markets all while in the midst of an ongoing capital raise. Belpointe PREP as the only publicly traded security of its kind – a freely traded Qualified Opportunity Zone Fund – not only offers investors passive participation in its real estate model but also all the tax advantages of being in an opportunity zone. Our target markets in the early going are Sarasota and Tampa/St. Pete, FL, Nashville, TN, Austin, TX, Boise, ID, and the Research Triangle (Durham, Chapel Hill and Raleigh, NC).
Belpointe PREP has an active blueprint for deploying its acquisition and construction team to exploit these markets and will strive to begin the process of establishing a distribution schedule in the future. In addition to developing properties, Belpointe PREP will also focus on acquiring existing qualified opportunity zone funds, with existing free cash flow, whose management may be looking to exit their investments. This course of action removes new construction risks and affords the possibility of immediate income for Belpointe PREP investors.
Investors with 2021 capital gains that want to learn more about how they may still be able to defer or possibly eliminate those capital gains before their tax bill comes due should pick up the phone and call me about all the features of what buying into OZ has to offer. April 15th, will be here in no time and with it the need to pay or offset tax bills at prevailing tax rates which may be adjusted higher over the course of 2022. If a re-worked version of Biden’s Build Back Better Plan goes through, I would expect that the demand for a tax shelter like Belpointe PREP (NYSE American: OZ) would be very high, especially if any new legislation were to be given retroactive effect as of January 1 of this year.
Belpointe PREP (NYSE American: OZ) is designed for investors who have capital gains from the sale of stocks, bonds, real estate, a business, collectibles, cryptocurrencies, trademarks, patents, precious metals, planes, boats, livestock, or any other intangible or tangible assets.
Have questions about how Belpointe OZ can provide opportunities for investment appreciation, income and help you or your clients to Defer or Eliminate Capital Gains Obligations?
Call or email us and we’ll take the time to answer all of your questions about Belpointe OZ and how reinvesting capital gains in a Qualified Opportunity Zone fund can be utilized to offset an investor’s tax obligation.
You can contact us at 203-883-1944 or IR@belpointeoz.com
Cody 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 of Belpointe PREP, LLC. 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.
©2022 Belpointe PREP, LLC. All rights reserved.
