Investing With A Clear Head
Welcome to the Real Estate Espresso podcast, your morning shot of what’s new in the world of real estate investing. I’m your host, Victor Menasce. People are used to walking on firm ground. If you’ve ever experienced an earthquake, it’s an unsettling feeling. Most people don’t know what to do. You’ll often see people running in all directions. Some of them are taking action which will improve their personal safety, while others are actually running into harm’s way.
Similar to an earthquake, the global and financial markets have been experiencing turmoil, and people seem to be running in all directions. With President Trump seeking to overturn decades of globalization and overriding the world’s trading rules, markets are in turmoil, and for good reason. One should not be foolish to think nothing has changed or to wish the turbulence away. You have to be thinking clearly at a time when many investors and policymakers are in an emotional mess. It takes a level-headed approach to think clearly.
Let me give you one example. At Stellantis, previously known as Chrysler, there is a halt on production at its manufacturing plant in Windsor, Ontario, due to excess inventory and the resulting impact of import tariffs. However, the main underlying reason for halting production is not the tariff but the significant 428 days of inventory on dealer lots. This case of Stellantis is just an example out of many, on the tariff narrative.
Now, you should not misinterpret what I’m saying. I’m not implying tariffs are not disruptive, they absolutely are. But they will harm manufacturers and consumers long before they result in new manufacturing jobs coming to the U.S. It requires more than a superficial analysis to truly understand cause and effect when it comes to these matters.
Opinions about the ongoing turbulence in the market stem from various issues, with the real turbulence that tariffs have injected being the first. There is a certain playbook here and these tariffs will likely get negotiated with around 50 countries in the world – or maybe more. I believe those countries who negotiate first will get the best deal. As you think about that, have an awesome rest of your day. Go make some great things happen. I’ll talk to you again tomorrow.
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