I feel comforted when I look at my stock portfolio right because my real estate portfolio continues despite the chaos, fear and uncertainty.
Economic uncertainty is surging with cuts in mass government personnel, new tariffs on Mexico, Canada and China, Oval Office exchanges between President Trump and Ukrainian President Zelensky and Vice President VANCE’s sharp words on Europe. Although the stock market despises uncertainty, real estate investors may find opportunities amidst turmoil.
The trade war begins March 2025
In 2023, Canada sent 76% of its exports to the United States, accounting for 19% of its GDP. In 2024, Mexico sent 78% of its exports to the United States, accounting for 38% of its GDP. Meanwhile, the U.S. exports to Canada and Mexico only account for about 2.7% of U.S. GDP. Obviously, Canada and Mexico will need to make concessions – otherwise, their economies may fall into recession.
I hope the rapid negotiations between these four countries are Why do I want to buy stock market falling. In a sense, I’m happy to be able to build a great equity position for kids with smaller stock market portfolios. At the same time, I see real estate as a hedge against uncertainty, and it is also a potential win for this year and the next.
How political and economic chaos affects investment
When uncertainty peaks, the stock market is usually sold. Since stocks have no obvious impact, their value depends on investor confidence and ability to predict future returns. But investors are worried about the unknown – like stepping into an already stinky elevator, just letting someone else walk in and assuming you are the culprit.
But real estate booms in times of uncertainty. Why? Because capital seeks safe and tangible assets. When stocks stumble, investors flock to Treasury bonds and hard assets like real estate and gold that tend to have better value. Although stocks may lose more than 10% of their market capitalization overnight, real estate is still a tangible, income-generating asset.
I’ve written before about how the trade war restarted the housing market. This prediction seems to be playing now. As interest rates drop, demand for real estate is increasing.
The impact of threshold cuts and economic uncertainty
To get a clearer picture of what’s going on in Washington, D.C., I contacted Ben Miller, co-founder and CEO Fundraisingheadquartered in Washington, DC. His insights are eye-opening, including discussions on “invisible stimulation.” You can listen to this episode by clicking on the embedded player below or by going to my Apple or Spotify channel.
Cutting the Governors was much faster than expected, thus amplifying their impact. If the cuttings are gradual, their effects will be easier to manage. Instead, the government is cutting work at an unprecedented rate, aiming to root waste and transplants.
While we can all agree that taxpayers should be transparent about where our funds go and how efficient government spends are, the speed and scale of these cuts and the speed and scale of lack of empathy for public officials who serve for the long term. My college roommate worked at USAID for eight years and did a great job helping distribute food and vaccinations in Africa – and now he is turned away without his own fault.
I sit in San Francisco, a technology and startup hub in the world, and I can’t help but see similarities with the private sector. In technology, layoffs occur quickly and the company continues to move forward without hesitation. This is a cruel world of competition.
If you are a government employee facing uncertainty, it may be wise to consider accepting severance payments and keep moving forward. The next four years (perhaps longer) will put a huge pressure on federal and local workers to conduct a rigorous scrutiny.
You might even feel the same stress as a personal finance writer who raises two young children and supports a spouse in expensive San Francisco – no double income! If you don’t like your job, it will be very difficult to survive.
Which sectors flourished during the last trade war?
With new trade conflicts with China, Mexico, Canada and even Europe, it is worth reexamining past market behavior.
During the 2018-2019 trade war, Goldman Sachs found the best performing sectors were:
- Utilities – Low beta monopoly with high dividends
- real estate – Provides stable and income hard assets
- Telecommunications Services – Defensive, cash-generating business
- Consumer staple food – Basic commodities that still need demand
- vitality – Hedging against geopolitical instability
Real estate has performed unsurprisingly during turbulent times. When uncertainty rises, investors hurriedly incorporated into bonds, pushing yields down. Mortgage rates drop, which then makes home ownership cheaper, thereby increasing housing demand.
Why Real Estate Capacity Is Better Stocks in 2025
Although real estate underperformed in 2023 and 2024, this trend is poised to reverse in 2025. I assigned one 70% probability The property will outperform stocks this year.
Corrected risks for stocks are largely due to expensive valuations and policy uncertainties, while real estate continues to provide stable, low volatile returns, which investors are eager for during turbulent times. The United States is already facing a housing shortage of millions of units. Real estate should be strongly supported as mortgage rates drop, demand for demand and a preference for stability.
This doesn’t mean that real estate will explode higher, but it just means that stocks may not bring the same advantages as they see in 2023 and 2024.
Ask yourself:
- Would you like to invest in all of this uncertainty in stocks at all times highs?
- Or do you want to have a 7%+ cap commercial real estate at a deep discount deal similar to the 2008 financial crisis, despite the strong economic and household balance sheets today?
I tend to be behind value plays a role in bubble inventory. Meanwhile, some of the best times to buy stocks are similar levels of economic uncertainty indexes, such as 2009 and 2020. So this might be a wise choice, i.e. the dollar average of both assets.
Don’t be complacent about stock market earnings
The last two years have been extraordinary for stocks, bringing rewards that feel like winning a lottery. But long-term returns tend to normalize. Goldman Sachs, JP Morgan and Vanguard all predicted 10-year S&P 500-year earnings. If the historical progress p/e with an valuation mean of 18 times, the upside potential is limited. In fact, there may be huge drawbacks.
Once you have achieved substantial gains, capital preservation should be your top priority. The first rule of financial independence is not to lose money. The second rule is not to forget the first rule, but again, always try negotiating severance payments if you plan to quit. No drawbacks.
2023 and 2024 are gifts on the market. Let’s not assume that 2025 is equally generous. Instead, it’s time to appreciate real estate and consider if you’re underweight. A steady return of 4%–8% in real estate beats the wild volatility of the stock market, which could eliminate wealth overnight.
Conclusion: Hard assets win during uncertainty
When chaos, fear and uncertainty dominate, investors should restore the basics – assets and tangible assets that generate income. Hard assets provide utility, stability, and in some cases joy.
As 2025 unfolds, don’t underestimate the role of real estate as a hedge against uncertainty. If the world collapses, the most valuable asset you will have is your home. Don’t take it for granted.
If you want to invest in real estate without taking on mortgages, tenants or maintenance, please check out Fundraising. The fundraising company has approximately $3 billion in assets and more than 350,000 investors, specializing in residential and industrial real estate. I personally invested $300,000 and generated more passive income through fundraising. The minimum investment is only $10, so everyone can easily get the average of the dollar and build exposure.
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