417: Market Update from a Former Sovereign Wealth Fund Manager

Wealth Formula by Buck Joffrey

I feel like I am going through another major transition in my life. I turned 50 last September—a fact that I deliberately chose not to publicize.

I hate to admit it, but much of my behavior is stereotypical divorced midlife crisis stuff. I got a Ferrari, I’ve been working out incessantly and…I’ve been considering adding publicly traded equities to my portfolio.

The last one might be the biggest surprise to you and to me. For the last decade, Wealth Formula has consistently bashed the stock market. What changed?

Well…the last two years have not been particularly kind to me financially and it is because of my 80% real estate investment portfolio.

Rising interest rates disproportionately affect the real estate markets because they are so heavily dependent on debt. That’s why economists keep talking about how the economy continues to fare well while we real estate investors feel like it’s 2009.

Don’t get me wrong. I am not going full-on stocks, bonds, and mutual funds. I have made my money in real estate and that will continue to be my alpha. And despite a down market, I am WAY ahead of where I would be, had I been a traditional investor using a money manager. No doubt about it, real estate has made me wealthy over the last 15 years despite the recent hiccup.

I’m just thinking about taking lessons from institutional investors. Perhaps it’s middle age, but the idea of a more balanced, less volatile portfolio sounds appealing. Right now, I have nearly zero exposure to publicly traded stocks. Maybe that number should be closer to 25%? Maybe I should be in some kind of “all-weather portfolio?”

Remember, personal finance should be personal. You’ve got to think about your goals and where you are in life. You have to treat your investment portfolio like you are deploying money for your own family office.

Zulfe Ali knows a lot about risk and managing portfolios. He does that for family offices and high-net-worth individuals like you. He’s different from your usual financial advisor because he recognizes the importance of alternative assets in a portfolio—something he learned from running a multi-billion dollar sovereign wealth fund in the Middle East.

On this week’s episode of Wealth Formula Podcast, I speak to Zulfe not only about investment strategy but also get his take on the current economy. Having a guy with his credentials giving us a market update is extremely valuable so make sure to tune in!

Show Notes:

13:39 What’s been going on with the economy?

16:15 Why the interest rate increase did not result in a recession

19:02 Outlook for interest rate

26:35 The inverted curve

35:11 Wealth preservation

41:58 How does Zulfe approach high-level portfolios?

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