BiggerPockets Real Estate Podcast - Scott Trench: How I'm Protecting My Money From “Irrational Exuberance”

Episode Date: March 14, 2025

Stock prices are falling, and Americans are fearful. Tariffs, trade wars, economic tension, and interest rates are putting pressure on asset prices. Commercial real estate has already crashed, but the worst may be yet to come. Home prices aren’t growing; in fact, small multifamily prices may even be declining. What should you do? We can’t provide financial advice, but Scott Trench, CEO of BiggerPockets, is revealing how he’s protecting his wealth in 2025.  A recession could be coming; we’re all aware of that. But what does this mean for real estate, stock, crypto, and gold prices? The “irrational exuberance” bubble seems to have popped after stocks hit wildly high price-to-earnings ratios, Bitcoin soared to six figures, and gold began a massive runup. Things are about to change very quickly. Scott is putting his money where his mouth is, revealing the contrarian moves he’s making to his portfolio to keep his wealth growing during this increasingly volatile period. He’s giving his stock market prediction, interest rate prediction, and home price prediction and sharing where real estate investors should look for stellar deals as everyday Americans run away in fear.  Find investor-friendly tax and financial experts with BiggerPockets Tax & Financial Services Finder!   In This Episode We Cover Scott’s exact portfolio allocation: what he’s selling and what he’s holding NOW The speculative bubble that could be very close to (if not already) popping Will interest rates rise further despite market volatility?  The biggest buying opportunities for investors to score killer deals on investment properties The critical risk to index funds that investors MUST be aware of  Could commercial real estate prices crash even more, creating substantial potential margins for investors?  And So Much More! Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/real-estate-1095 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [e-mail]. Learn more about your ad choices. Visit megaphone.fm/adchoices

What's going on everybody? I'm Scott Trench, host of the Bigger Pockets podcast today. You may also know me as the host of the Bigger Pockets money podcast over there with my co-host Mindy Jensen and CEO of Bigger Pockets. I'll be filling in for Dave today, who is out on a personal matter. And I couldn't be more excited to share with you today my thesis for what's going on here in 2025. I'm a pretty big bear in many sectors of the economy. And I hope that today's discussion will give you insight into how I'm I break down the opportunities to invest across most of the major asset classes that are available to ordinary Americans, what I'm doing in response to that analysis with my personal portfolio, and the tax considerations that are in play in the context of me making real moves here in Q1, 2025 with my portfolio that involve realizing gains in some cases to reallocate funds to different asset classes and sectors. So spoiler alert again, I'm a big bear. It's written right there on this top of the screen here. I think we're in a period that I'm calling irrational exuberance 3.0.

And irrational exuberance refers to a state where investors are wildly overvaluing assets relative to their intrinsic or fundamental value. This book was written by a very famous economist called Robert Schiller and then published, I think, March 1999 right before the dot-com crash. He posted an update to that book in 2008. And then he posted another one, I think in 2014. I might have to go back and check that one, in fact, check that, which obviously did not happen. But the guy is two out of three. And I'm thinking about these irrationally exuberant areas of the economy across real estate stocks and other asset classes. And I think as we head into 2025, we're seeing a lot of similarities to what Professor Schiller from Yale University called out multiple times throughout his career.

Guys, this is a presentation. I prepared a slide deck. I'm going to be referring to charts and graphs throughout this discussion. I will try to be mindful of those of you who are listening in your cars via the podcast feed, but this may be one that you'd want to go back and check out on YouTube because I will be referring to these charts and graphs and you're able to see where the source data comes from in many of these cases. What I'm going to do today is I'm going to do a two-part walkthrough for my macro thesis. First, I'm just going to talk about what's happening. in the major asset classes that are available to most Americans. And those asset classes are cash, treasuries or bonds, residential real estate, commercial real estate, stocks, Bitcoin, and gold. I understand that there are many other alternatives, but those are the ones that are widely available to most Americans most of the time. And then I'm going to talk through the areas where I see the biggest risks and opportunities in the context of what's going on in these categories. And then I'll talk about what I specifically have done, which is major, serious, more than 50% reallocations across my holistic personal financial portfolio.

The tax impact of making those changes and how I'm thinking through that. And then I'll wrap it up by inviting feedback, debate, and dialogue. And I'm sure many of you will refer back to this next year to make fun of me for how wrong I am on some of these things and how expensive my set of moves are. All right. Let's start off with my predictions, fears, and optimism, and I'll just get right to the headlines and come back and give you all the detail shortly after previewing those. First, headline. I think that interest rates are going to remain stubbornly high here in 2025, unless there's a deeper recession or we get a new Fed chair appointment, even if that Fed chair will be appointed in 2026. The simple headline of a doveish

Fed chair could be a mid again for that. The second headline here is, I fear a sharp pullback or even a possible crash in U.S. stocks for a great number of reasons that I'll get into in detail as we come back to this section. The third headline is that I think that residential real estate and specifically small multifamily residential properties could have already seen a serious correction in prices. For example, I just bought a property that was originally listed at $1.2 million in February 2024, and after six price reductions, I bought it for less than the last price reduction for 20% less than its original list price, which I think they would have gotten in 2023. Is that a buying opportunity?

The last major headline is that I believe that commercial real estate has seen significant losses and devastation in terms of valuation, and that a sophisticated buyer may have major opportunities to buy at the bottom in what could be a once-in-a-generation opportunity here in 2025. I believe that that opportunity set will hit regionally for different markets at different times, and yet really got to have a pulse on whatever region you're investing in in order to take advantage of that timing in the commercial real estate sector, specifically with regard to multifamily in 2025. So those are the headlines. We'll also talk up a little bit about other asset classes like Bitcoin and gold briefly. All right. So let's get into it and start with interest rates.

What's going on with interest rates? Well, in order to understand interest rates, we have to talk about the 10-year treasury yield, which is a key correlate to 30-year fixed rate mortgage rates and to mortgage rates in the commercial real estate sector. What I'm showing on this slide is a chart of the yield curve at two different times. One is a normalized yield curve from 2018. And you can see that the federal funds rate, the overnight rate for U.S. treasuries, was 1.25%, one and a quarter. and the 10-year Treasury was about 2.85%. That's a 160 basis point spread, 150 basis point spread. That's a normal yield curve.

You'd expect interest rates to be higher on long-term debts than on short-term debts. What we see today is a slightly inverted or flat yield curve. We see that the federal funds rate is 4.5 today, and we see that the 10-year rate is also 4.5%. So what's going on here is that the market expects the Federal Reserve to lower rates. So they're buying the 10-year at a 4-and-a-quarter rate expecting that the Fed will lower rates. The problem with this is that for the yield curve to normalize, such that 150 basis points separate the 10-year yield from the overnight rate, the Fed will have to lower rates six times

in 25 basis-point increments in order to make that happen. If the Fed lowers rates six times in the context of current inflation numbers, it means something very bad is going on elsewhere in the economy where millions of people literally are losing their jobs. That is not a fun environment to be in if you own assets that are correlated with interest rates. Almost certainly, if rates come down that rapidly and that steeply, you will see asset prices coming down with that.

So I am a big bear on this. I think that a much more likely scenario is that the Fed will lower rates one, two, or maybe up to three times over the next year, and that the 10 year will actually slowly rise another 50 to 75 basis points hovering around 5% throughout the course of 2025. That's my base case. A ton of things can come in. This could get worse than that, right?

So the Fed could lower rates no times, and you could see this thing go up to 5.75% for the 10-year yield. You could see inflation remaining stubbornly persistent with long-term inflationary pressures like boomers exiting the workforce and slowing population growth, driving up wages and prices in many cases. You could see near-term inflationary pressure also put upward pressure on interest rates. Those threats are acute from slowing inbound migration. We're not seeing any illegal immigration.

We saw that slow dramatically with the new administration. The threat of forced deportations could also reduce the population and put upward pressure on wages and therefore prices. Last, we could see tariffs impacting the CPI, right? When you charge people more for imports into the United States, and when goods from the United States are seeing tariffs put in place as a countermeasure, you could see the cost of many goods and prices increasing here. All, as a reminder, if inflation is high, the Fed will tend to increase interest rates to put downward pressure on prices. Again, the offsets to this are a recession or a new Fed chair appointment. Next, I want to discuss the money supply here, M2 specifically. I think there's a narrative

out there that it's okay to buy assets, even at extraordinarily high prices that they're at today, because of this narrative that government's just printed money and the dollar is losing all this value and so that those prices do not actually reflect the massive expansion of the money supply. I think this is a misnomer, and I want to go into this briefly here. M2 is a measurement of short-term liquidity positions held by Americans. So cash and bank accounts, savings accounts, money-market accounts, and other near-term liquidity positions here. And this did grow substantially. It grew about 39% from January 2019 to January 2022. And prices reflected that. Inflation, wages, and many asset prices, including real estate prices, reflect that expansion. But from 2022 to the

present, there hasn't been a material increase in the money supply. And from In 2023, January 2020, January 2023 to January 2025, the money supply is only increased by 1.6% while inflation has materially outpaced that. So something other than the money supply is driving asset prices in the last couple of years. And I think it's a speculative bubble or worry that it's a speculative bubble in many of those asset classes. So I wanted to preview the next section with that. All right.

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The SMP 500 has grown 51% in terms of market capitalization from January 2023 to January 2025. Remember, the money supply increased 1.6% and this went up 50%. The SMP 500 is up 2.4%. 35 times since January 2019. As of February 2020, the S&P 500 is trading at a 38 times price to earnings ratio per the Schiller PE index. What is the Schiller price to earnings ratio? It takes the average real inflation adjusted earnings of every company in the S&P 500 over the last 10 years. It averaged it out over the last 10 years. And then it divides that by the current

market capitalization of the S&P 500, the current price. And that normalizes all the fluctuations from wild years like 2021. There's always a wacko year in any 10 year period. And what you're seeing is that the market is priced higher relative to historical earnings than at any time prior to 1999 in the dot com bubble. I believe that this is a major problem here and that 2025 poses serious risks to investors in stocks, which I'll get into here. So I will make no bones about it. I fear a potential sharp pullback or even a possible crows. crash in U.S. stocks in 2025. And I think the risks in this world far outweigh the possible

mitigates for stock investors right now. Some of those risks include those historically high price to earnings ratios I just discussed, slowing GDP growth. We're expected to see, per the Atlanta Fed, a 3% first quarter GDP contraction. We're seeing inflation remaining stubbornly high. I think the February inflation report is going to have a high 5% or even in the low 6% year-over-year inflation rate. And that is due to factors other than the money supply expanding. And specifically, and in the near term, I think that the risk of inflation due to just a threat rather than necessarily the implementation of tariffs is a major issue there. All right. I think I told everybody at the beginning of this presentation that I'd be wrong about a few things.

We recorded it on March 7th. And here we are on March 12th. And of course, the CPI inflation report came out and came in better than expected. So completely wrong on the inflation report item here. I'm surprised. I was not expecting to see February inflation come in with this kind of good news. I thought it would actually spike pretty meaningfully on tariff news, but shows you what I know and how I can be wrong immediately on many of these items here. This does not change the overall thesis that goes around with the rest of my analysis. I do believe that we are in for steadily rising inflation and a lot of upper pressure in a long-term sense and that this might have been a blip, but I'll be watching it carefully

and watch me be wrong on that one too. We're seeing rising layoffs, not just across the federal government, but in many private companies. We're seeing many companies in the S&P 500 with material earnings misses through this point in the first quarter 2025. And then there's CNN puts together a pretty good fear and greed index, which is in the extreme fear territory right now. Now, these are the risks that I see. And like I said, I think that they overwhelm the possible risk mitigants here, like AI increasing productivity and corporate profits to the tune that it wipes out all these other things. I think that there's a lot of benefits that AI can bring to the United States of America and to its people in terms of productivity. But I am not

convinced that those will flow directly through to the bottom line in corporations to justify this level of prices. I think that there's a potential for a U.S. Golden Age. Absolutely, that's an item here. But I think that some portion of the population literally believes that all of these things will come true. And I will tell you what, we are not going to see an environment in 2025 where we have zero inflation and we implement tariffs and we have full employment and we get lower interest rates and we balance the federal budget and we see record corporate profits and we see lower taxes and we increase military spending and we have world peace and all asset classes soaring about a new American golden age. Maybe some of those come true, maybe most of them, maybe one or

two, but no way do all of those things come true. And if that's your portfolio plan, I want to scary a little bit. I don't think that that's a realistic assessment of what's going to be happening over the next couple of years. And I think that's what this pricing level suggests the market believes. I don't see what else you can really assume here with a historically high price to earnings ratio. You are betting on record corporate profits, likely in combination with many of these items. That's my stance. That's how I feel. Understand that that's going to anger some people or make and people anxious, but it's just how I feel. So one of the other risks I want to point out here is I think that a large portion of the United States population is investing with this VT-Saxon-Chill

mentality, where it's set it and forget it, invested in index funds, they always go up in the long run. I believe that on top of the risks that I just outlined on the prior slide, that about 50% of the U.S. population who lean liberal, who, by the way, are pretty meaningfully more likely than their conservative counterparts to invest the majority of their wealth and index funds? I think a good chunk of those people are going to be asking themselves the following question. Am I comfortable with leaving my portfolio, which today is 100% allocated to largely U.S.-based stocks? Am I comfortable leaving that in place at current pricing given the actions of the new Trump administration through its first six weeks? and I believe that the answer to that question is going to be no for an increasing number of those people

as the months and portions of 2025 proceed here. And I think that's a material risk to sustaining very high price to earnings ratios in the event that the right hand side of my chart here, all the things that I just said, good things that had to happen in 2025 don't happen. So again, I'm pretty worried about that. And I want to put out that data. This is bigger pockets money data. I love a better data set. I couldn't find anything on the internet that discussed different investment patterns between liberals and conservatives besides my polling of the bigger pockets audience here on YouTube. So if anyone has good data on that, I would love to see that. I also want to point out that investors are very sparingly allocated to bonds. The yield to maturity on bonds is very low.

Bond yields are about 4.3% for the Vanguard total bond market index fund, which is not interesting to many of the people on bigger pockets. It's not interesting to younger investors, and that's a yield to maturity. The actual income that one realizes from a bond fund is actually lower than that. And one of the reasons why bond yields are so low is because they've been declining for nearly 50 years on a continuous basis until the last two or three years when the Fed started raising rates. But I want to remind folks that bonds are a hedge against downward pressure and other asset classes.

They're a hedge against the Fed lowering rates in a hurry in normalizing this yield curve. If the Fed lowers rates, we could see the equity value of some of those bond funds go up sharply. And so I've repositioned to bonds, even with those low yields, as a hedge against some of the risks that I see in the current market here. We'll talk about that in a minute. Let's talk about residential real estate next. What's going on with residential real estate? Residential real estate in terms of single-family homes, the Case Schiller National Home Price Index,

which measures the value of existing home sales over $2,000. time. So it excludes new home sales. Home prices have gone up about 50% since 2019. 50% is a faster relative growth rate than the money supply. So I do think that there is some risk in the residential real estate sector, but that 50% increase in absolute value is dramatically less over the six-year period from 2019 to 2025 than the 2.3 times. growth in the S&P 500, for example. In the last two years, while the S&P 500 rose 50%, the K. Schiller National Home Price Index rose 5%. So housing is kind of like this stalwart in the economy. You could argue that it's a little overpriced and that it should be more responsive to rising

interest rates, which is a direct correlate to affordability in housing for this. But in terms of absolute dollars relative to the money supply, housing has outpaced the money supply, but not to the dramatic degree of other asset classes, at least in the single-family home price index category here. Rents have been another story here. Rents grew about 30% between 2019 and 2022, and they've come down a few percentage points in terms of median rent across the United States over the last couple of years. One of the major drivers of rents coming down over the last two years in particular has been a flood of supply. We've actually added the most multifamily apartment units in American history in terms of supply in 2025. This impact has obviously felt

differently in different regions, but it's been an important headline here. So what I've found is that I have not seen major opportunities in buying single family rentals in my hometown of Denver. But I have seen, as I previewed earlier, what I believe to be a big difference in the purchasing power, the buyer's market with respect to income properties here in Denver, Colorado. So again, this is the fourplex that I just purchased in a part of Denver called Barnum, which is an up-and-coming neighborhood that I think is going to see a material amount of appreciation over a multi-decade period. I've crossed out any personally identifying information about the listing agent or the listing brokerage,

and I've also crossed out some of the detail about the specific asset here. But I want to point out that this asset was listed at $1.2 million and again dropped price six times from 1.19 to 1.175 to 1.145 to 1.1.4.5 to 1.4.5 to 1. 1 million in July of 2024 to 1.08 in November to 1.69 later that month to 1 million 50 in December. And I went under contract for this thing on January 16th for $1 million even. So that's a material decline. I believe that this property would have transacted for 1.2 to 1.25 million as recently as 2023. And if you believe me, if I if I'm right on this, that's a 20 to 25% drop in the value of this asset over a three to five year period.

That's a crash. I believe that income property, specifically duplexes, triplexes, and quadplexes, and specifically those in the $750,000 plus price point for multifamily right now in Denver is in a crash or a deep recession here. And I think it's a great time to buy those properties. I also worry about the value of my existing portfolio, should I try to exit? some of the properties that I bought several years ago. I wonder if I'm actually not evaluating them as conservatively as I've told myself I am for the last couple of years. So something interesting

there. I'm cautiously optimistic that we're at or near the bottom with respect to income properties, at least here in Denver. I would hypothesize that that same reality may be true in places like Austin, Texas, like Phoenix, Arizona, like Atlanta, Georgia, like Raleigh, North Carolina, like parts of Texas and parts of Florida and other parts of the southeast as well. Okay, next up, let's talk about commercial real estate. I believe that this asset class has been absolutely devastated. During the same period where that money supply increased 40%, commercial real estate has declined a few percentage points. It's down 18 to 20% from its peak valuation and it's down at least 2 to 5% from 2019 before the pandemic. So this asset class has

absolutely gotten wrecked. Now, there's a couple of different sectors within commercial real estate. So this is a chart from statista.com talks about retail office industrial multifamily, but you can see that in every single one of these asset classes, you've seen cap rate, which is a way to value multifamily assets, increase by in some cases 30 to 40%. That's a devastating loss. That means that the asset value, normalized for income, has decreased by 30 to 40 percent. and those projections are actually fairly rosy. They think that the prices are going to come bouncing back in 2025 and 2026. I'm not quite as convinced by that for the projection years.

So this is a deep, deep crash. And I think that multifamily is going to face a toxic brew in 2025 of load maturation. A lot of the loans that were taken out five, six years ago matured in 2024. And there's a lot of extend and pretend going on, a lot of concessions granted by lenders. I think that at some point in 2025, as that has continued to ramp and as we come up on one year anniversaries of extensions and those types of things, we're going to start to see action being forced on the owners of these apartment complexes and they're going to be forced to sell, just like the person who sold me that quadplex was forced to sell it, I believe, due to market

conditions here. The second thing that's going on in addition to these load maturity's wall, which, by the way, a lot of people thought that was going to happen last year because that's what you see a lot of those low maturities were actually stuck in 2024, there could absolutely be further delays in that. Lenders are reluctant to have to foreclose on properties. So there could be a lot of noise in there. It's going to be really hard to time this thing precisely, which is why I think you really have to know what you're doing and really going to learn how to train yourself to spot a distress deal or a really great deal in a lot of these markets around the country. The other thing that's

compounding the problems here in multifamily is the declining rents that we talked about, right? When rents go down and people are willing to pay less per dollar of income, that destroys asset values here in the multifamily sector. And one of the things that keeps rents from growing is when new apartments are constructed, right? When a new apartment is constructed, that's nice and new and swanky in downtown Austin, the wealthiest or highest earners who are willing to spend on luxury apartments move into that, vacating the next apartment down, then the next people move into that and that chain reaction results in lower housing costs. all the way down the stack. And that's why you're seeing Austin, Texas rents reportedly down 22% year over a year. Austin, Texas, a lot of good things going for. A lot of people will move into Austin, Texas over the next five to 10 years. But no metro grows at 7% per year. And when you increase your housing stock and multifamily by 7%, you will see rents coming down within that year.

Last year, they added 10% of their existing housing stock with a similar number of units here. So that's going to take a toll on apartment valuations. And you're going to see rents go down in Austin. You're going to see valuations for apartment complexes go down. And that could be a major buying opportunity for folks who go in now as opposed to a few years ago. So I think that's going to be one of the most extreme examples in the country. But you can see that Phoenix also is going to have a high percentage of its existing housing units added in terms of new multifilitary. family stock. You see Charlotte way up there. You'll see Raleigh, North Carolina way up there.

And in other markets, this impact will be negligible, right? New York is not going to see the same problems for downward pressure on rents as a place like Austin, Texas, or Phoenix, at least not from supply. Other considerations with demand come into play, but you won't see massive supply forcing rents down in some markets around the country. So it'll be a mixed bag regionally. But I think this is a big opportunity. And you can bet that I'm starting to look at as many offering memorandums from syndicators and apartment complex buyers who are purchasing these types of assets in Austin, in Raleigh, in Phoenix, here in Denver, in my hometown, and in a couple of other markets around the country because of this dynamic. All right, we've got to take another quick break.

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And they're still the only lender with a DSCR price beat guarantee. That means faster closing, the best terms, zero guesswork. That's Dominion Financial. Check them out at biggerpockets.com slash dominion. Again, that's biggerpockets.com slash dominion. All right, thanks for sticking with us. Let's jump back into my macro market outlook for 2025. All right. Last asset class I want to touch on is Bitcoin.

I'll also throw gold into this discussion. These assets are exploding in value. And let's be very, very clear. This is not just a response to the money supply. If Bitcoin and gold were truly inflation hedges, they would be rising in conjunction with the money supply and holding their value relative to inflation. They are not. They are far, far outpacing growth in the money supply in terms of asset appreciation. Bitcoin has grown 900% in the last five years while the money supply has grown 40%.

Gold has paced the S&P 500 in terms of the rate of its price growth over the last five, six years. years. And it has grown about 40, 50% in the last two years. Actually, had a big spike here in February and March, in addition to being up almost like 30% year every year, January 2024 to January 2025. So whatever these assets are, gold and Bitcoin, they are not stores of value or hedges of inflation right now. There's clearly something else going on. I'd call it speculation. I'm worried about it. I own no gold. I own no Bitcoin. Let's talk next about my portfolio, the response to these situations and my tax philosophy. So what am I doing? I'm playing a lot of defense. By the way, this excludes my primary residence. So my financial portfolio was 30% in residential real estate,

essentially all here in Denver, and including another major piece that is a rental property that I just purchased here in Denver, that property I just showed you there, the quadplex in downtown. I'm still 30% in index funds, but that's a major departure from what was previously almost 75% of my portfolio in index funds. I'm 30% in cash. That's a huge. I'm 30% in cash. It's a huge. huge cash position for me. And I'm 10% in bonds, having reallocated 40% or 50% of my respective retirement account portfolios and HSA investment portfolios to bonds. I've stopped buying stocks and I'm stockpiling additional cash. I sold a huge percentage of my aftertax index funds and I will pay taxes on those gains. I told you about that paid off quadplex,

reallocated those properties. I will likely take some of this cash and return it to private lending. I was doing hard money lending or private lending last year. I'll likely do another one of those. And I'm reviewing every commercial real estate pitch I can get my hands on for office or apartment complex acquisitions in the hardest hit markets. Okay, let's talk about taxes here. If you rebalance or reallocate your portfolio, you need to understand that there will be tax consequences for that. And those are real. If one has a $100,000 gain, for example, and you pay tax and you invest the $65,000 after tax balance into the market. It's not one-to-one after tax. It's much worse. That tax drag will grow that at $65,000 to $168,000 over the next 10 years. The 100K, if you just never realize the

gain, would grow to $259,000 over that same time period. And if you were to pay tax at the same marginal rate, you would not be left with $168,000. You'd actually have more at this point. So it is a real inefficiency to make moves in your portfolio, willy-nilly here. I made my moves despite knowing this for three reasons here. First, I'm optimizing for post-tax net worth that I can spend or use today, not the terminal number 10 years or 30 years from now in my portfolio. That's a major factor. I want this number because the $65,000 after-tax is what I can actually use to pay for trips or vacations or those types of things today in my personal life with complete freedom. The second reason I was willing to make this tax consideration is because I believe that in the

future, taxes will go up. And that will also include adjusting for inflation here. So I believe that, for example, when I go to sell this $259,000 portfolio in 10 years, my tax rate could be 30, 40 percent at that point, which actually makes this better after tax move in some ways, or at least minimizes that tax impact. So that's a fundamental long-term bet. About half of the bigger pockets money audience agrees that tax rates will be going up long-term and a slightly less than half. I think I'm crazy and think they'll be about the same. I also only realize these gains. I'm only doing these moves because of how I feel about the broader market, and I believe that I'll be getting a better risk-adjusted return with the reallocation,

which will offset some of that tax impact over the next couple of years. Hopefully that makes everybody. But yes, I thought about taxes in this. If you are considering making big portfolio moves, you definitely want to talk to a tax planner. We've got a bunch on BiggerPockets.com. slash taxes, or you go to BiggerPockets.com and on the Navbar, it will say Tax Pros. Just click on that. You'll be able to find several to interview and think through any considerations. You also find financial planners who can talk to you about certain moves. So that's the show. That's what I have today, I know that a couple of the moves that I'm making could be missed opportunities. If the market continues to compound for the S&P 500, I could be way less wealthy over the next

10 to 20 years having sold now. I know that people will disagree. I know that some people will laugh at me. I know some people will get angry with me. And some people will do the digital equivalent of telling me that I should know better than to attempt to time the markets or make drastic moves like this based on macro conditions. And I also know that now that I've actually acted on these, and now that I've actually given this presentation, they are sure to be immediately wrong, and I'll be humiliated and embarrassed by market behavior over the next year. I hope that, at the very least, I get some thoughtful and realistic challenges from everybody who's watching this, and I specifically, and am most hoping for challenges to my fundamental

observation about the money supply. This money supply observation is really driving a lot of the rest of my thesis here. I believe, again, that the growth in asset values in the last two to three years is due to an extraordinary amount of speculation and not growth in the money supply. And if somebody has a counterpoint to that, specifically with a different definition of the money supply, I'd be very grateful to hear that and could update my thoughts and feelings on the market accordingly. So please link to that in the comments section here on YouTube or again, send me an email at Scott at biggerpockets.com. Thank you so much for listening to me today. It's a true honor and privilege to step in for Dave and to share my views on the macro environment

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