California Reopens. For Tourists. Office Buildings are Still Ghost Towns.

​Open for Tourists
On June 15, 2021, California reopened. I’m saying “for tourists” because although offices were open for business, too, nobody showed up (continue reading for details). California Governor Gavin Newsom made the announcement at Universal Studios in Hollywood, CA, surrounded by minions and a troll. I visited Fisherman’s Wharf in San Francisco on June 14, 2021. Happy travelers were everywhere, laughing at sea lions and posing for pictures. The restaurants, like Fog Harbor Fish Company, had a wait list. If you’re headed to Disneyland and you are vaccinated, you don’t even need to wear a mask.
 
Offices are Still Ghost Towns
Since I was in San Francisco, I headed over to the Salesforce Tower to see who would show up for work at the office, and how long the lines to get into the building would be. When you have these towers that reach 1000 feet or more into the sky, combined with social distancing protocol, the elevator commute time alone can be prohibitive.
 
Less than a handful of people entered the Salesforce building at 8 a.m., flashing their health approvals on their mobile phones. The gondola leading up to the public park was empty, but still running. (Fortunately, someone turned it off by the time I came back about an hour later.) Almost all of the local restaurants that support the office workers were closed. The sole food option was an Acai Bowl food truck. There was nobody in line.
 

I walked over to Embarcadero for breakfast. There things were moving. Dozens of Millennial joggers, with their cell phones secured to an arm band or designer activewear, loped along the shore. At 8:45, the ferry let off a boatload of passengers, most of which appeared to be essential workers.
 
I decided to see if the 9 a.m. start time might yield more staff to enter buildings. At 8:55 am, I followed the only professional on the street, a prematurely balding banker-type, who carried his lunch in a brown bag in one hand and a cold brew in the other. He hustled to make it to the Google building by 8:58. I waited for a few minutes to see who else might show up. Another 9 people entered One Market Plaza.
 
Back at Salesforce, a dozen young tech workers entered the building between 9:15 and 9:25. In the public park on the roof of the Salesforce Transit Center (70 feet in the sky), three small groups of professionals were having Walk and Talk meetings (by small I mean 2-3 people in each group). It was easy to distinguish these groups from the smattering of mothers, fathers and grandparents pushing toddlers to the Toddler Tuesday song and dance event scheduled for 10 am.
 
On Monday, June 7, 2021, Salesforce CEO Marc Benioff announced on CNBC that more than half of his staff (50-60%) will work from home – up from about 20% before the pandemic. According to Benioff, “The past is gone. We’ve created a whole new world, a new digital future.” In a study by Citrix, 90% of Millennial and Gen Z workers do not want to return to the office full-time, and over half wish to work from home full-time. In the press release, Citrix concludes, “As the data makes clear, today’s business leaders are clearly disconnected from what the Born Digital [Millennials and Gen Z] really want from work.”

Work-from-Home clearly creates challenges for the commercial real estate industry, which has more than recovered in share price from the pandemic, but still faces serious fiscal challenges and heightened vacancies in their buildings (even when the space is still under lease). While corporate C-levels are upbeat on their earnings calls, focusing on the long-term lease commitments and their market-leading capabilities, many are quietly selling stock. Recent C-Suite, board and institutional insider stock sales include Cushman & Wakefield, CBRE, Boston Properties, Colliers and Hudson Pacific. Most of these companies, with the exception of Hudson Pacific, have share prices that are trading at all-time highs (above pre-pandemic levels). In this industry, the share prices are high, price-to-earnings ratios are outlandish, revenue is down, debt is heightened, the business model is suffering a structural blow, and credit ratings are at the lowest rung of investment grade (BBB). Cushman & Wakefield was downgraded  to B+ (junk) by S&P Global on March 23, 2021.
​
What Will Happen to All of The Empty Office Buildings?
While CRE CEOs are reporting to shareholders that their mostly empty office buildings have tenants that are “waiting to see” what the future holds, many CEOs, like Benioff, Jack Dorsey (Square and Twitter) and Mark Zuckerberg (Facebook), are clear that Work-from-Home has become a permanent part of life. A bank C-level located in New York City anonymously reported that his company negotiated to reduce the office space to a third of what it was pre-pandemic, adopting a new Work-From-Home and desk-share model. Meanwhile Doug Linde, the president of Boston Properties reported in the 1Q 2021 shareholder earnings call that “the office tenants are deep into planning for their return to the physical in-person work environment as we approach the back half of 2021.”

Companies looking to get rid of office space are driving rents down. Sublease availability increased 61.7% year-over-year in New York City during Q1 of 2021, higher than it has been in 3 decades, according to a Savills report released on March 31, 2021. Some building owners have plunged their properties into remodeling. Others are focusing on biotechnology and health care (which now has an emerging Teledoc option). Not every empty mall or building can become a data center or Amazon warehouse. Boston Properties president Doug Linde admits that there is a lot of subleasing activity, saying, “There is a lot of sublet space on the market, but a large portion of it is not accessible because of short term, unworkable existing conditions or, quite frankly, the user discomfort with the lessors’ profile.” 

​Salesforce is Boston Properties’ #1 client, with WeWork as its #8 client. Companies entered  into decades-long lease agreements before the  pandemic changed the way we all do business. This was the fundamental problem that squashed the WeWork IPO in August of 2019. Sophisticated investors thought that The We Co.’s business model of taking on long-term leases, with only short-term commitments from entrepreneurs and startups, was going to be a problem in the late stage of the business cycle.
 

Those long-term leases provide some support for the CREs in the short-term. Interest rates are low. Stocks are high. Terms are relatively easy. Only a portion of their leases will come up for renewal in 2021 or 2022. Extricating from a long-term lease is a strategic maneuver for any company looking to downsize their office space. However, if Activision Blizzard is any example, the companies are in trouble once the leases do come up. Activision abandoned their Boston Properties campus in Santa Monica on March 26, 2021.
 
What Could Possibly Go Wrong for the Building Owners?
Tenant bankruptcies, high levels of sub-leasing and interest rates are the biggest risks to CREs in the near and mid-term. (Over the long-term, office buildings will have to revise their business model for a post-pandemic world, if they manage to survive on reduced rent revenue without declaring bankruptcy.) Low interest rates, mortgage-backed securities purchases by the Feds and the Secondary Market Corporate Credit Facility kept these debt-laden commercial real estate companies off of the ropes during the pandemic. (All of the companies I examined were rated in the BBBs or lower.) When interest rates rise, it will make borrowing more expensive and difficult – which is one of the primary reasons that Jerome Powell assured everyone today that interest rates could remain low until 2023 (inflation and pandemic permitting).
 
The Feds announced on June 2, 2021 that they will begin selling off their SMFFC holdings. According to the press release, “SMCCF portfolio sales will be gradual and orderly, and will aim to minimize the potential for any adverse impact on market functioning by taking into account daily liquidity and trading conditions for exchange traded funds and corporate bonds.” Vornado and Boston Properties’ bonds are part of the portfolio that will be sold.

The Higher the Dividend, the Higher the Risk
REITs are a risky move in a post-pandemic world. Most companies are heavily indebted, are trading at unsustainably high multiples and have slow or negative revenue growth. They pay high dividends and commissions to keep investors and brokers interested, respectively. Many are unaware of the risks they are taking on, particularly since the structural shift to Work-from-Home is being under-reported. Those companies that have a competitive advantage (such as outdoor space for relaxed social meetings and LEED status) and fiscal husbandry should fare better than companies with older energy-hog buildings with higher debt. Figuring out what to do with the empty buildings and how to negotiate with their tenant customers will take a few years to sort out. Are the CRE CEOs clueless or simply reassuring investors until they have good news about an innovative transition plan to report?
 
Bottom Line
If you are working from home, enjoy only having to dress waist up for your work week! If you are investing in REITs, it’s best to factor in the impact that the Work-from-Home trend is having on office buildings. If you’ve been hearing that Zoom and Teladoc meeting software are going to be irrelevant as people head back to work, that’s not what is what is showing up in the data or what I’m seeing in my boots-on-the-ground research.



Join us for our Oct. 9-11, 2021 Financial Empowerment Retreat. (Click to learn more.) In 3 days, you'll learn what's safe in a Debt World, how to make a smart investment in real estate, pick hot funds and companies (like crypto, cannabis and our 2021 Company of the Year), and how to incorporate hard assets and safe havens into a well-diversified wealth plan. You'll discover how to protect your wealth and save thousands annually in your budget with smarter big-ticket choices. The retreat is a complete Money Makeover that will transform your life forever. Bring your friends, family and teens for an unbelievably low group rate. Call 310-430-2397 or email info@NataliePace.com to learn more now. Register by June 13, 2021 (Sunday) to receive the lowest price and a complimentary, private, prosperity coaching session (value $300). 

​

​Other Blogs of Interest
Money Market Funds, FDIC, SIPC: Are Any of Them Safe? 
My 24-Year-Old is Itching to Buy a Condo. Should I Help Him?
Will Cannabis be Decriminalized This Summer?
The 12-Step Guide to Successful Investing.
​Gardeners Creating Sanctuary & Solutions in Food Deserts.
2021 Company of the Year
​Almost 5 Million Americans are Behind on Rent & Mortgage. Real Estate Hits All-Time High.
​Beyond Meat, Oatly & The Very Good Food Co. 
Is Cryptocurrency the New Gold?
Rebalancing Your Nest Egg IQ Test.
Answers to the Rebalancing Your Nest Egg IQ Test.
Tesla & Nio Will Report Spectacular Earnings.
The Coinbase IPO.
Restore Our Earth on April 22nd (and Every Earth Day).
Should You Sell in May and Go Away? 
Adding Shoot the Moon Performance to Your Nest Egg.
Videoconferencing in a Post-Pandemic World (featuring Zoom & Teladoc).
Sanctuary Sandwich Home. Multigenerational Housing. Interview with Lawrence Yun, the chief economist of the National Association of Realtors. 
10 Budget Leaks That Cost $10,000 or More Each Year.
The Stimulus Check. Party Like It's 1999. 
Kushner's Times Square Building Plunges 80% in Value.
Will There be a Spring Rally?
Cannabis and the Road to Decriminalization in the U.S.
Hot ETFs Return Up to 50% Since October. 
​Investor IQ Test 2021.
Investor IQ Test Answers
​Shoot the Moon Stock Picks
​2021 Crystal Ball.
Would You Pay $50 for a Cafe Latte? Is Your Tesla Stock Overpriced?
Can Medmen Avoid Bankruptcy?
​Bitcoin is Back, Baby!
Real Estate Prices are Going Up. And Down.
​Cannabis is Decriminalized. Stocks Triple.
Thanksgiving in a Pandemic. The Sustainability Silver Lining.
Money Stress Killed My Friend
Real Estate and Housing 2021. Challenges & Opportunities
​Real Estate in a Pandemic. Interview with Mike Fratantoni, the Chief Economist of the Mortgage Bankers Association.
​Bonds are Illiquid & Negative-Yielding.
Annual Rebalancing is a Buy Low, Sell High Plan on Auto-Pilot.
​Is Your Bank a Junk Bond
Put Your Money Where Your Heart Is.
Schwab's Chief Fixed Income Strategist on What's Safe.
China's Tesla (Nio). 2Q Sales Soar.
Why Are You Still Renting? (Errr. There is More Than This to Consider!)
​Wealth Myths That Keep You Poor. Prosperity Truths That Make You Rich. 
Technology and Silver are Golden.
Real Estate: Feeling Equity Rich? Make Sure That Feeling Isn't Fleeting.
Airline Revenue Plunges 86%. 
10 Questions for College Success.
Is FDIC-Insured Cash at Risk of a Bank Bail-in Plan?
8 Money Myths, Money Pits, Scams and Conspiracy Theories.
Why Are My Bonds Losing Money?
The Bank Bail-in Plan on Your Dime.

​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.
​

About Natalie Pace
Natalie Wynne Pace is an Advocate for Sustainability, Financial Literacy & Women's Empowerment. She has been ranked as a No. 1 stock picker, above over 835 A-list pundits, by an independent tracking agency (TipsTraders). The ABCs of Money remained at or near the #1 Investing Basics e-book on Amazon for over 3 years (in its vertical), with over 120,000 downloads and a mean 5-star ranking. The 4th edition of The ABCs of Money was released on October 17, 2020. 

Natalie Pace's easy as a pie chart nest egg strategies earned gains in the last two recessions and have outperformed the bull markets in between. That is why her Investor Educational Retreats, books and private coaching are enthusiastically recommended by Nobel Prize winning economist Gary S. Becker, TD AMERITRADE chairman Joe Moglia, Kay Koplovitz and many Main Street investors who have transformed their lives using her Thrive Budget and investing strategies. Click to view a video testimonial from Nilo Bolden. ​

Dear Natalie,
I had a session with you, and you said to make sure my cash accounts were FDIC-insured. I found out that several of my accounts are covered by SPIC (or is it PIDC?), which my broker said was better because it will cover up to $500,000 in cash and covers stock and bond losses up to $250,000. Seems like a better deal than FDIC. Would you agree? Signed, The Acronyms Are Confusing 
 
 
Dear Acronym Sleuth,
 
We’d all love to put our accounts with a brokerage that covers stock losses! However, sadly, that’s a pretty big misrepresentation of what SIPC insurance covers. That is why it is so important to read the fine print, and not just trust what the broker-salesman tells you. Have you ever heard the joke, “What do you call the person who got Cs in medical school?” (Doctor.)
​
Below is a general breakdown of the protections offered by the various acronyms. Consult the fine print of your personal bank or brokerage agreement to know exactly what your brokerage does and does not offer.
 
FDIC-Insured. The Federal Deposit Insurance Corporation is an independent federal agency that insures cash held in FDIC-insured banks. Many FDIC-insured brokerages and banks now offer a bank sweep program where you can actually be insured above the $250,000 maximum individual coverage. For instance, my brokerage offers FDIC coverage up to $500,000 for individuals and $1,000,000 for joint accounts. Federally-insured cash is considered to be the safest way to hold cash. In 2021, you’re not getting paid to save, but at least it is insured up to the limits.

SIPC-Insured. The Securities Investor Protection Corporation is a nonprofit corporation that helps investors when their brokerage fails. The SIPC is backed by assets of about $5.0 billion, with an additional $2.5 billion line of credit with the U.S. Treasury. (Sadly, yes, that’s billion with a b, not trillions with a t.) The fund ensures against brokerage default (not stock losses). So, if you have the misfortune of investing with Bernie Madoff or MF Global, then the SIPC is the firm that will try to recover as many of the securities as possible to distribute to the victims.
 
FYI: Most of Madoff’s clients were invested for years, thinking they were earning 12% annualized and compounding. So, even though the SIPC trustee boasts of returning almost 70% of the money stolen in the Madoff Ponzi scheme (after 12 years), it is a much smaller amount than most investors believed they were owed. One more important clarification: the SIPC cash coverage is limited to $250,000 (not $500,000).

Money Market Funds. Money market funds are not guaranteed by the government or by any bank. It is possible to lose money in a money market fund. There can be hidden charges and expenses. Under certain circumstances, the money market fund can impose liquidity fees and redemption gates (in other words, charge you to access your money, or limit the amount you can redeem). Some funds came close to the thresholds when liquidity fees and redemption gates might have been imposed in March of 2020, which exacerbated the dash for cash.
 
Is There Any Risk in a Money Market Fund? The Treasury Department, Securities and Exchange Commission and the Financial Stability Oversight Council are working together on Money Market Fund Reform (again). In the early days of the 2020 pandemic, MMFs were stressed from rapid redemptions. Treasuries and bonds were also illiquid. On March 23, 2020, the Federal Reserve Board rescued MMFs, Treasuries, Mortgage-Backed Securities, bonds and select bond funds. A Money Market Fund Liquidity Facility with $10 billion of credit protection was established. The markets have stabilized today, however, the Feds want investors to understand that “MMF investors, rather than taxpayers, bear market risks.” They also want to incentivize and enable the fund companies to handle stress without relying upon government support. According to the Report from the President’s Working Group issued in December of 2020, the government “has repeatedly provided emergency liquidity to prime and tax-exempt funds and also has obscured the risks of liquidity and credit shocks for MMFs.”
 
In 2021, you simply aren’t being paid to take on the risk of the MMF. Many money market funds have expense ratios of at least 0.28%, while offering no yield. Yes, investors are actually losing (a little) money on this security. Those are some of the reasons why FDIC-insured cash can be a better choice in today’s debt world. The problem, however, is that in your retirement fund, you don’t have an option to invest in FDIC-insured cash. So, many people with a 401K are locked into money market funds, with the hope that at least MMFs won’t be as volatile as bonds or stocks. If you are over 59 ½, if you were severely impacted by the pandemic or if you have left 401Ks in the account of previous employers, you should be able to roll-over your 401Ks into self-directed IRAs at a brokerage that does offer FDIC-insurance for the cash portion of your portfolio.

Money Under Your Mattress. There’s an old joke in my family that someone buried their cash during the Great Depression, and the chickens dug it up and ate it! Keeping cash on hand is very risky. Wolves, thieves and chickens abound.
 
Bottom Line
So, what is safe in a world where bonds and money market funds are losing money, and you have to be careful about the acronym you choose for your cash account? In today’s world of very high-leverage (a lot of debt), FDIC-insured cash is just the first step in a two or three-step process to make sure that you protect your assets and are positioned to earn an income on your wealth in the years to come. Protecting your assets is so important today that I spend one full day on this topic at my Investor Educational Retreats. Call 310-430-2397 or email info@NataliePace.com to learn more now. You can read testimonials, and learn the 15+ life math tools that you’ll learn and master, on the retreat flyers on the home page at NataliePace.com.
 
Don't be caught unaware. Don't be complacent. Don't rely upon others to do it for you. It's time to know what you own and be the boss of your money. 

​
Join us for our Oct. 9-11, 2021 Financial Empowerment Retreat. (Click to learn more.) In 3 days, you'll learn what's safe in a Debt World, how to make a smart investment in real estate, pick hot funds and companies (like crypto, cannabis and our 2021 Company of the Year), and how to incorporate hard assets and safe havens into a well-diversified wealth plan. You'll discover how to protect your wealth and save thousands annually in your budget with smarter big-ticket choices. The retreat is a complete Money Makeover that will transform your life forever. Bring your friends, family and teens for an unbelievably low group rate. Call 310-430-2397 or email info@NataliePace.com to learn more now. Register by June 13, 2021 (Sunday) to receive the lowest price and a complimentary, private, prosperity coaching session (value $300). 

About Natalie Pace
Natalie Wynne Pace is an Advocate for Sustainability, Financial Literacy & Women's Empowerment. She has been ranked as a No. 1 stock picker, above over 835 A-list pundits, by an independent tracking agency (TipsTraders). The ABCs of Money remained at or near the #1 Investing Basics e-book on Amazon for over 3 years (in its vertical), with over 120,000 downloads and a mean 5-star ranking. The 4th edition of The ABCs of Money was released on October 17, 2020. 

Natalie Pace's easy as a pie chart nest egg strategies earned gains in the last two recessions and have outperformed the bull markets in between. That is why her Investor Educational Retreats, books and private coaching are enthusiastically recommended by Nobel Prize winning economist Gary S. Becker, TD AMERITRADE chairman Joe Moglia, Kay Koplovitz and many Main Street investors who have transformed their lives using her Thrive Budget and investing strategies. Click to view a video testimonial from Nilo Bolden. ​

My 24-year-old son is itching to purchase a condo. He believes that he can purchase for about the same price that he is paying rent. Should I help him make the down payment?
Signed, Rich Dad
 
 
Dear Rich Dad,
 
A recent survey conducted by BankRate shows that 2/3rds of Millennials are having a severe case of buyer’s remorse. After the fact, they are discovering that everything costs a lot more than they were originally told, including the mortgage and the upkeep of owning your own home. (Did your son factor in the HOA fees?) They also worry that they overpaid, and they don’t believe they made a good investment.

When a real estate broker-salesman tells your son that he can buy a condo for the same price that he’s renting, there is a lot of the story missing:

• HOA fees,
• Closing costs,
• Home furnishings,
• Homeowner Association fees and assessments,
• Water and trash bills (most landlords pay this one), and,
• Maintenance and Upkeep

 
Buy What You Can Afford
When you think about buying a home, there is a lot more to consider than just the cost of rent. Are you limiting your purchase, including all of the expenses of homeownership, to under 28% of your budget? This is the most important, but not the only, consideration.
 
The Thrive Budget
When you limit your basic needs expenditures, including taxes, to 50% of your gross income, then you have 50% to thrive. Struggling to survive is a nightmare, and could put you in financial danger if you are property rich and cash poor. Click to personalize your own Thrive Budget. 
 
Some Other Important Considerations

• Is this where you want to live for the next 8-10 years, minimum?
• Do you know the neighborhood? Will you feel at home here? Can this be a place where you can rejuvenate yourself?
• Are you purchasing for a good price?
• Should you think bigger, and buy a place where you can have room-mates to help with the costs?
• Should you consider multi-generational housing?
• How will climate change affect your area? Will insurance costs go through the roof?

 
​Multi-Generational Housing
Thinking bigger, having more people in the home and sharing community areas like the kitchen, dining and bathrooms, is a far more efficient use of space. What costs more in total can actually cost each individual much less than they are currently spending. You can have as much privacy living in your luxurious/spacious room in a big house, as you would living in a cramped apartment, where half of your space is taken up with cooking, eating and showering. Multi-generational housing is more popular today than it has been in a century (more popular than even in the Great Depression).

​FYI: the trend toward buying bigger homes is what has led to the dramatic increase in the median home sales price. Larger homes are more expensive, so with more being sold, the average price is soaring.
 
Apply The 3-Ingredient Recipe for Cooking Up Profits
Once you own your home it, it’s yours until you can sell it again (or lose it back to the bank). So, you must have an eye towards the future, on purchasing something you can afford and on buying it for a good price. Cast your vision at least 7-10 years out. Do you really want to be in this area when you are ten years older than you are today? Should you be downsizing, monetizing or moving in the relatives?
 
The 3-Ingredient Recipe for Cooking Up Profits reminds you that purchasing a home is an investment, and must be evaluated as such. With all of the ads on the Internet, combined with the motivation of real estate broker salesman to make their commission, a lot of people feel pressured to buy now. However, it is always a good strategy to do your due diligence before you jump into any investment.
 
The 3-Ingredient Recipe for Cooking Up Profits

1. Start with what you know and love
2. Pick the leader
3. Buy low, sell high (easy to say, hard to do)

 
Buying High Can Ruin Your Life (and Your FICO score)
 
Buying a home at the top of the market can ruin your life  and your FICO score for a decade. If home prices fall beneath the mortgage commitment, your credit score goes in the toilet because 1/3 of your score is your assets to debt ratio. (After home prices hit an all-time high in 2006, they dropped by half between 2007 and 2011.) If your mortgage goes underwater, you won’t be able to sell it because you owe more than it’s worth. That means you’re locked in, and you probably can’t move, even if you were offered a better job in a different city. Purchasing high makes it harder to monetize. You might be stuck paying much more than you can rent it out for.


​

Almost 5 Million Renters and Homeowners Skipped Their Payment in March 2021
It has been a seller’s market of late because there just aren’t a lot of listing on the Multiple Listing Service, especially in the starter home market. However, the pandemic has been the main cause of that. There has been a moratorium on foreclosures and evictions. Almost 5 million homeowners and renters skipped a payment in March 2021 – meaning there is more distress in residential real estate than most people are aware. Additionally, people have been afraid to list their homes because they don’t want strangers tramping through their quarantine and Work-From-Home office.
 
With the end of the eviction and foreclosure moratoria at the end of June, more inventory will come to market. Additionally, with vaccinations and the opening up of the United States, Boomers who are ready to downsize should start listing their homes for sale.
 
There are 2.6 million U.S. homeowners who are severely under water on the mortgage, meaning that the mortgage loan is 25% higher (or more) than the value of their home. That should be a red flag reminder of what hell it is to buy high. How is it that so many people are distressed when real estate prices keep soaring? These are people who have never recovered from the Great Recession. During the loan mod process, the bank packs the missed payments and penalties onto the lump sum of the mortgage. Homeowners are trapped into paying, even though they are in perpetual danger of foreclosure, because they don’t have any equity or life boat to escape the situation. (There are potential solutions. If you are in this predicament, email our office at info@NataliePace.com for resources.)
 
More Inventory is Expected as Early as October
More inventory should hit the marketplace by October of 2021. More inventory typically equates with lower prices. So, taking the time now to:

• Do your research,
• Shop in the shadow inventory,
• Think bigger,
• Discover whether or not multi-generational housing is right for you, and,
• Apply the Thrive budget and The 3-Ingredient Recipe for Cooking up Profits,

 
Will give you better odds of making a home purchase that can be your son’s sanctuary and not his hell.
 
Bottom Line
If your son wants to buy a home, he’s likely being fueled by FOMO, ads and salesmen. He might have dollar signs in his eyes thinking about all of the money that has been made this year in real estate. (Past performance doesn’t equal future performance. When you drive while looking in the rearview mirror, you might crash.)
 
We can’t expect our kids to know about investing if we’ve never taught them the ABCs of money that we all should’ve received in high school. Therefore, your best move right now is to educate your son on successful investing, rather than contribute to something that could actually be a nightmare for him. Owning a home is absolutely one of the best ways to build wealth and to stop making the landlord rich. However, if you buy more than you can really afford or purchase at an all-time high, the opposite is the case. Being on the right side of the trade is always key to successful investing.  
 
More Real Estate Resources
https://thriveglobal.com/stories/homeowners-are-worth-46-times-more-than-renters/
https://www.nataliepace.com/blog
https://www.nataliepace.com/blog/almost-5-million-americans-are-behind-on-rent-mortgages-while-home-prices-hit-new-highs
https://www.nataliepace.com/blog/sanctuary-sandwich-home-multigenerational-housing-replaces-the-nuclear-family
https://www.nataliepace.com/blog/kushners-times-square-building-plunges-80-in-value
 

​Join us for our Oct. 9-11, 2021 Financial Empowerment Retreat. (Click to learn more.) In 3 days, you'll learn how to make a smart investment in real estate, pick hot funds and companies (like Tilray and our 2021 Company of the Year), and how to incorporate hard assets, hot stocks, crypto and safe havens into a well-diversified wealth plan. You'll discover how to protect your wealth and save thousands annually in your budget with smarter big-ticket choices. The retreat is a complete Money Makeover that will transform your life forever. Bring your friends, family and teens for an unbelievably low group rate. Call 310-430-2397 or email info@NataliePace.com to learn more now. Register by June 13, 2021 (Sunday) to receive the lowest price and a complimentary, private, prosperity coaching session (value $300). 

Other Blogs of Interest
Will Cannabis be Decriminalized This Summer?
The 12-Step Guide to Successful Investing.
​Gardeners Creating Sanctuary & Solutions in Food Deserts.
2021 Company of the Year
​Almost 5 Million Americans are Behind on Rent & Mortgage. Real Estate Hits All-Time High.
​Beyond Meat, Oatly & The Very Good Food Co. 
Is Cryptocurrency the New Gold?
Rebalancing Your Nest Egg IQ Test.
Answers to the Rebalancing Your Nest Egg IQ Test.
Tesla & Nio Will Report Spectacular Earnings.
The Coinbase IPO.
Restore Our Earth on April 22nd (and Every Earth Day).
Should You Sell in May and Go Away? 
Adding Shoot the Moon Performance to Your Nest Egg.
Videoconferencing in a Post-Pandemic World (featuring Zoom & Teladoc).
Sanctuary Sandwich Home. Multigenerational Housing. Interview with Lawrence Yun, the chief economist of the National Association of Realtors. 
10 Budget Leaks That Cost $10,000 or More Each Year.
The Stimulus Check. Party Like It's 1999. 
Kushner's Times Square Building Plunges 80% in Value.
Will There be a Spring Rally?
Cannabis and the Road to Decriminalization in the U.S.
Hot ETFs Return Up to 50% Since October. 
​Investor IQ Test 2021.
Investor IQ Test Answers
​Shoot the Moon Stock Picks
​2021 Crystal Ball.
Would You Pay $50 for a Cafe Latte? Is Your Tesla Stock Overpriced?
Can Medmen Avoid Bankruptcy?
​Bitcoin is Back, Baby!
Real Estate Prices are Going Up. And Down.
​Cannabis is Decriminalized. Stocks Triple.
Thanksgiving in a Pandemic. The Sustainability Silver Lining.
Money Stress Killed My Friend
Real Estate and Housing 2021. Challenges & Opportunities
​Real Estate in a Pandemic. Interview with Mike Fratantoni, the Chief Economist of the Mortgage Bankers Association.
​Bonds are Illiquid & Negative-Yielding.
Annual Rebalancing is a Buy Low, Sell High Plan on Auto-Pilot.
​Is Your Bank a Junk Bond
Put Your Money Where Your Heart Is.
Schwab's Chief Fixed Income Strategist on What's Safe.
China's Tesla (Nio). 2Q Sales Soar.
Why Are You Still Renting? (Errr. There is More Than This to Consider!)
​Wealth Myths That Keep You Poor. Prosperity Truths That Make You Rich. 
Technology and Silver are Golden.
Real Estate: Feeling Equity Rich? Make Sure That Feeling Isn't Fleeting.
Airline Revenue Plunges 86%. 
10 Questions for College Success.
Is FDIC-Insured Cash at Risk of a Bank Bail-in Plan?
8 Money Myths, Money Pits, Scams and Conspiracy Theories.
Why Are My Bonds Losing Money?
The Bank Bail-in Plan on Your Dime.

​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.
​
​

About Natalie Pace
Natalie Wynne Pace is an Advocate for Sustainability, Financial Literacy & Women's Empowerment. She has been ranked as a No. 1 stock picker, above over 835 A-list pundits, by an independent tracking agency (TipsTraders). The ABCs of Money remained at or near the #1 Investing Basics e-book on Amazon for over 3 years (in its vertical), with over 120,000 downloads and a mean 5-star ranking. The 4th edition of The ABCs of Money was released on October 17, 2020. 

Natalie Pace's easy as a pie chart nest egg strategies earned gains in the last two recessions and have outperformed the bull markets in between. That is why her Investor Educational Retreats, books and private coaching are enthusiastically recommended by Nobel Prize winning economist Gary S. Becker, TD AMERITRADE chairman Joe Moglia, Kay Koplovitz and many Main Street investors who have transformed their lives using her Thrive Budget and investing strategies. Click to view a video testimonial from Nilo Bolden. ​

​The MORE Act is Reintroduced.
The MORE Act to decriminalize cannabis was reintroduced to the U.S. House of Representatives on May 28, 2021. Since then, some cannabis stocks have rallied. Tilray is up 28.6%. New Age Beverages (CBD Products and Tahitian Noni wellness shots) gained 5.5%. Innovative Industrial Properties (a cannabis REIT) is up 4.9%. Cronos is flat. Hexo and Canopy Growth are actually down -1.3%. (All prices are as of June 9, 2021.)
 
The Halo Affect
Why isn’t the news adding a halo to all cannabis stocks? The most likely explanation is that Tilray is a meme stock. The company has 3 forums on Reddit, and commands attention on the 10+ million strong WallStreetBets Reddit forum. On February 10, 2021, meme stonk aficionados pushed Tilray to $67/share. Optimistic “Diamond Hand Hodlers” have their sights set on 420. (Tilray’s current share price is $21.43.) While that might sound outlandish, the WallStreetBets traders pushed Gamestop – a company that was on the brink of bankruptcy – from $4/share to $483/share.
 

​Tilray’s Team & Products
Unlike some other meme stocks, Tilray has an outstanding business model, market-leading products and a best-in-class C-Suite and Board of Directors. On May 3, 2021, Tilray was named to Time Magazine’s 100 Most Innovative Companies. On May 5, 2021, Tilray and Aphria merged. This follows on the heels of Aphria’s purchase of Sweetwater Brewing in December of 2020.
 
Sweetwater Brewing is a popular microbrewery that is uniquely positioned to launch CBD beer. Their 420 Strain G13 IPA has a proprietary hemp-type flavor. According to Aphria’s 3Q 2021 earnings call, SweetWater’s recently launched Hazy, a year-round IPA, is already the No. 1 new craft brew item in the southeast – led by Millennial demand. Sweetwater has been hosting an annual 420 music festival in Atlanta for 15 years. The purchase of this brewery adds lifestyle panache to the Tilray brand and the potential for a CBD beer, in addition to sales.

Tilray is now under the leadership of Aphria’s CEO Irwin Simon (the former founder and CEO of Hain Celestial), with Walter Robb (former co-CEO of Whole Foods) and Brendan Kennedy (former CEO of Tilray) on the board of directors. Tilray also boasts of an impressive international advisory council that features government officials from around the world, including Michael Steele (former chairman of the Republican National Committee), Joschka Fischer (the former Vice Chancellor of Germany), and prominent leaders in Canada, Australia, Portugal, New Zealand and France.
 
Will Cannabis Finally be Decriminalized in the U.S.?
As you can see in the cannabis map (at the top of this blog), there are only seven states in the U.S. where cannabis is fully illegal. Cannabis is fully legal in 18 states. With a former RNC chairman on the advisory board of Tilray (Michael Steele) and the former Republican Speaker of the House on the board of Acreage Holdings Inc. (John Boehner), alongside a Democrat-controlled House and Senate, there is a good chance that cannabis decriminalization passes. (This is not a guarantee. There is always a chance of a filibuster.) On May 11, 2021, Chuck Schumer, the Senate Majority Leader, promised that he, alongside Senator Cory Booker and Senator Ron Wyden, will be introducing a legalization bill “shortly.”
 

 
Forward Outlook
Last year’s combined revenue of Tilray and Aphria was $685 million – before considering revenue brought in by the Sweetwater Brewing acquisition. Cash burn is still a consideration. Aphria burned through -$361 million in the 3rd quarter of 2021, while Tilray lost $5 million in its most recent quarter. The combined companies held about $530 million in cash and cash equivalents at the end of February 2021.
 
At today’s price, Tilray’s market cap is $9.59 billion. The last time that Aphria and Tilray “shot the moon” as meme stocks (on Feb. 10, 2021), the combined value of the companies was over $20 billion. That only lasted a few hours, and then the stocks crashed down to 1/3 of their value at the top.
 
Cannabis stocks have been quite volatile. However, the world has been normalizing weed as a recreational drug. Amazon just announced that they’ve scuttled their drug testing program. So, when the U.S. does decriminalize, and CBD beverages and edibles come out of the shadows and into stores, the company that offers the most popular brands should be able to increase its value exponentially faster than the less sexy brands in the industry. There are a lot of if’s in that sentence. However, pulling the plug on prohibition and ending the War on Drugs has populist appeal – something many politicians can use to win votes, particularly from Millennials and Gen Z.  
  
Bottom Line
Tilray is positioning itself to be a leader in the medical cannabis market, in CBD beverages and edibles, and in topicals. According to Tilray CEO Irwin Simon (in his 3rd quarter 2021 Aphria earnings call) the goal is to capture a 30% market share in the $6 billion Canadian market. With popular brands like Sweetwater Brewing (Hazy IPA and Oasis vodka seltzer, with expansion into CBD and higher intensity beverages) and High Park Holdings (Chowie Wowie Gummies) leading the way, and the potential for decriminalization in the U.S., the prospects for this market leader to innovate and expand are quite high.
 
Full disclosure: I own shares of Tilray and New Age Beverages.



Join us for our Oct. 9-11, 2021 Financial Empowerment Retreat. (Click to learn more.) In 3 days, you'll learn how to pick hot funds and companies (like Tilray and our 2021 Company of the Year), and how to incorporate them into a well-diversified wealth plan. You'll discover how to protect your wealth and save thousands annually in your budget with smarter big-ticket choices. The retreat is a complete Money Makeover that will transform your life forever. Bring your friends, family and teens for an unbelievably low group rate. Call 310-430-2397 or email info@NataliePace.com to learn more now. Register by June 13, 2021 (Sunday) to receive the lowest price and a complimentary, private, prosperity coaching session (value $300). 

About Natalie Pace
Natalie Wynne Pace is an Advocate for Sustainability, Financial Literacy & Women's Empowerment. She has been ranked as a No. 1 stock picker, above over 835 A-list pundits, by an independent tracking agency (TipsTraders). The ABCs of Money remained at or near the #1 Investing Basics e-book on Amazon for over 3 years (in its vertical), with over 120,000 downloads and a mean 5-star ranking. The 4th edition of The ABCs of Money was released on October 17, 2020. 

Natalie Pace's easy as a pie chart nest egg strategies earned gains in the last two recessions and have outperformed the bull markets in between. That is why her Investor Educational Retreats, books and private coaching are enthusiastically recommended by Nobel Prize winning economist Gary S. Becker, TD AMERITRADE chairman Joe Moglia, Kay Koplovitz and many Main Street investors who have transformed their lives using her Thrive Budget and investing strategies. Click to view a video testimonial from Nilo Bolden. ​

​The 12-Step Guide to Successful Investing.
Your easy-as-a-pie-chart plan to lasting wealth & money while you sleep. Follow the 12-step program below to get started.

12 Steps to The ABCs of Investing  
​
1. Tithe 10% to your Buy My Own Island Fund.
2. Keep a percent equal to your age safe, not in stocks.
3. Overweight or underweight safe based on market conditions.
4. Know what is safe.
5. Diversify into 10 funds.
6. Underweight the bailouts & vulnerable companies or industries.
7. Get hot.
8. Rebalance 1-3 times a year.
9. Use limit orders to capture gains, not stop losses.
10. Be the boss of your money.
11. Buy & Hope is a last-century strategy.
12. Real estate.


And here are more details on each step.


1. Tithe 10% to your Buy My Own Island Fund

Remember to put 10% of your gross income into tax protected retirement accounts. (Rich people don’t put money in jars.) You want your investments in retirement accounts so that your wealth grows without you having to pay capital gains taxes. These plans are also financial predator proof (debt collectors can’t put a lien on your retirement accounts).
 
Match your employer’s contribution in the 401(k), but not more, IMHO. The good news is that the employer’s contribution is free money. The bad news is there is not very much freedom of choice in your 401K. That’s why it’s important to also contribute to your Health Savings Account, your own IRA, your kids’ college or dependent IRA funds, etc. (The college funds should be coming out of your education fund.) Self-directed IRAs typically have freedom to invest in the universe of stocks and funds. This is where you can add in hot industries and countries that might not be found in your 401K selections.
 
Name your funds with goals. That will make it more exciting to do your regular rebalancing, as you see just how much progress you are making toward the desired destination.

2. Keep a percent equal to your age safe, not in stocks.
​
The rule of thumb is to always have a percentage equal to your age safe, not in stocks, equity funds, mutual funds, etc. Most people have far more at risk than they realize. The last two recessions have lost investors more than ½ of their at-risk investments. Simply keeping the proper amount safe protects your wealth from these devastating drops.  
 
3. Overweight or underweight safe based on market conditions.
 
In 2021, the U.S. economy is expected to grow at 6.5% GDP. That’s better than it’s done in decades. If stocks and real estate weren’t already so high priced, it would be smart to overweight into equities (stocks). When the economy is expected to contract, overweighting safe is a good idea. (This is something we encouraged before the last three recessions. Yes, the data is that reliable.)

Basing your strategy on data is far better than running with your emotions, such as those risk tolerance questionnaires that many broker salesman will give you. Your emotions are rarely your friend in investing, particularly if you are a newbie. Most people have a lot of risk tolerance when stocks are high. Market tops are when you want to sell high and get more conservative, however. Few people have any tolerance for risk at the market bottom because they feel that we are in an Apocalypse. Often, they’ve already lost a lot of money. However, the market bottom is the time when you could be thinking about leaning into risk, particularly if the recovery is looking strong.

4. Know what is safe.
​
We live in a world of debt, where many things are very highly leveraged. That adds credit risk to the “safe” side of the traditional retirement strategy. At the same time interest rates are at rock-bottom. So, you have credit risk and interest rate risk in bonds. Bonds are traditionally thought of as safe. However, today they are vulnerable to capital loss, and they can also be illiquid.

Getting safe in 2021 is so tricky that we spend one full day on it at our Investor Educational Retreat. If you have a lot of bonds and wonder if you might be more vulnerable than you know, then I strongly encourage you to read the Bond section of The ABCs of Money. Consider getting an unbiased second opinion from me or attending our June 4-6, 2021 Investor Educational Retreat. We host retreats at least three times a year, so check out the NataliePace.com homepage for an upcoming retreat. Call 310-430-2397 or email info@NataliePace.com for pricing, testimonials and additional information.

5. Diversify into 10 funds.
 
Diversifying into 10 funds makes your investment strategy easy-as-a-pie-chart. 10 funds are all you need for proper diversification, and they are far easier to manage when you’re doing your rebalancing session. If you have pages and pages of holdings, chances are you actually only have 2-4 slices, rather than the 10 funds. (That many holdings is a red flag that you are on the Buy & Hope, last-century strategy – riding the Wall Street rollercoaster and losing half of your wealth in recessions.)
 
What are the 10 funds you should be diversified into? Small, medium and large, value and growth, and four hot industries or countries. See the sample pie chart below. FYI: the target date retirement funds are not well-diversified and typically perform below the market index. They do not allow you to rebalance regularly, which is an essential strategy in today’s world.

6. Underweight the bailouts & vulnerable companies and industries.

Over half of the S&P500 is at or near junk bond status. There are companies that have very strong revenue growth, almost no debt and a boatload of cash (like many technology firms), there are also companies that have been borrowing from Peter to pay Paul for a very long time, have very low credit ratings, have very high debt, and are either losing revenue or have flat revenue growth (like Boeing, Ford, most of the major U.S. banks, and many more companies that were founded more than 50 years ago). General Electric is proof of what happens when you invest in highly leveraged companies for the dividends. So be careful of your value funds and dividend funds. We address that as well at the Investor Educational Retreat.

​

7. Get hot.
​
Have you been seduced into the crypto craze? Even with the correction of the past month, Bitcoin is still up more than 3-fold on a 12-month basis. Whatever you think is going to Shoot the Moon this year, whether it is crypto, cannabis, electric vehicles, artificial intelligence or biotechnology, if you have a slice of it in your nest egg that can increase the performance and your wealth. Also, because shooting stars can drop back to Earth, the pie chart system and regular rebalancing helps you to be on the right side of the trade. If your slice of Bitcoin becomes 10 slices, as it did in April of this year, the pie-chart system is prompting you to sell high and trim your 10 slices back to one or two slices. Not only does that allow you to keep your money, it also affords you the opportunity and the emotional fortitude to buy more at a lower price, if the asset value tanks (and you still think it’s hot).

8. Rebalance 1-3 times a year.

Rebalancing 1-3 times a year is one of the most important things that you can do. Every year you get a little bit older, and should have more on the safe side. In a bull market, your wealth increases. Most of your slices swell in size.

When you compare a sample pie chart of what you should have with what you do have, rebalancing becomes easy and quite visual. If the slice is bigger than it should be, it is prompting you to sell high. Conversely if a correction has plunged prices and your slices are slim, they are prompting you to buy low. In this way, the system puts your emotions on the right side of the trade, whereas brokerage statements do quite the opposite, with losses in red and gains in green.  
 
The safe side and overweighting protect you from the plunge. Market timing doesn’t work. When you feel like selling, that’s usually the best time to buy, and vice versa. Rebalancing regularly is a buy low, sell high plan on auto-pilot.

It’s important to remember that the reason people don’t buy low is that they cannot buy low. If they have suffered massive losses, they have no liquidity – no money on hand to take advantage of opportunities. When you are keeping an appropriate amount liquid, as the pie chart system instructs you to do, you have the capital to buy low.

9. Use limit orders to capture gains, not stop losses.

Think capture gains, not stop losses. A lot of people think they should be using stop losses to prevent themselves from losing money. Your best protection from a correction is keeping a percent equal to your age safe. Overweight a little more (act older than you are) if you think the economy is weak. Because of the volatility in equities, bonds and real estate, if you set stop losses you will be losing over and over again. If you simply changed your strategy to a capture gains system, which is what the diversification and regular rebalancing is all about, then every time the markets shoot the moon, you’re selling high. Every time the stocks tank, you’re buying low. Limit orders can help this process. We talk about this at the retreat as well.

10. Be the boss of your money.

Your accountant should be well-versed in tax strategies. Your broker-salesman should be helpful in setting up a new account, making a contribution, rolling over a 401(k) into an IRA and other brokerage transactions. Be careful getting stock tips or strategies from “financial advisors” (who are most often hired as salesmen) or accountants (who should be buried in tax strategies, not equity analysis). There are still a lot of brokerages and broker-salesman that adhere to the last-century Buy and Hope strategy, which has been a disaster in the 21st-Century. Be the boss of your money. Adhere to the time-proven 21st-century strategy of proper diversification and regular rebalancing. Your financial team works for you. It’s your money and your future at risk, not theirs. Once you know what a healthy nest egg looks like, you can take charge, rather than having blind faith that someone else is doing the right thing for your money. Select your financial team as if your life depends upon it because your lifestyle does.

11. Buy & Hope is a last-century strategy.

Buy & hope is a strategy that has lost over half in the last two recessions. On this plan, investors have to use the bull markets to make up losses, rather than build their wealth. That is not a financial plan; that is a Wall Street rollercoaster. The easy-as-a-pie-chart nest egg strategy with annual rebalancing earned gains in the last two recessions and has outperformed the bull markets in between. It’s less time and less money. It’s easy and logical. It works.

12. Real estate is part of your wealth, but not part of your liquid assets (nest egg).

When you were constructing your sample Nest Egg Pie Chart, do not include the equity you have in your home or any other hard asset in the line that asks for your liquid assets. Real estate and other hard assets are an important piece of your wealth. However, you want liquidity (savings, stocks, bonds) and stability (hard assets).

Owning your own home is one of the best ways to build wealth – unless you purchase at too lofty of a price or buy more than you can afford. For important real estate strategies, read the Real Estate section of The ABCs of Money. This is also covered in our Investor Educational Retreats. My May 14, 2021 blog talks about how the real estate market will be impacted by the end of the eviction and foreclosure moratoria. Since almost five million Americans are behind on their payments, and real estate prices are unaffordable in many cities, is important to get your strategy from the data – not a real estate broker-salesman.
You can personalize your own pie charts using our free web apps. Simply go to NataliePace.com and click on the app badge. Or you can email info@NataliePace.com with the subject line, “I want my free web apps.”
 
Fix the Roof While the Sun is Still Shining
 
You wouldn’t wait for the rain to see whether or not your roof is leaking. You want to make sure your house is secure before any natural disasters occur. In a world where financial disasters are coming pretty regularly, it’s a very good idea to make sure that your fiscal house is sound now, while stocks and real estate are hitting all-time highs. It’s very easy to be complacent when everything is going well. However, stocks and real estate can’t keep shooting the moon forever. Both are very expensive. In the 21st-century, the corrections come swift and deep. If you wait for the headlines that trouble has arrived, it is always too late to protect yourself. (The next headlines about the Debt Ceiling will happen at the end of July.) So, make sure that your wealth is properly diversified, hot & protected now. Fix the roof while the sun is still shining.
 

Other Blogs of Interest
​Gardeners Creating Sanctuary & Solutions in Food Deserts.
2021 Company of the Year
​Almost 5 Million Americans are Behind on Rent & Mortgage. Real Estate Hits All-Time High.
​Beyond Meat, Oatly & The Very Good Food Co. 
Is Cryptocurrency the New Gold?
Rebalancing Your Nest Egg IQ Test.
Answers to the Rebalancing Your Nest Egg IQ Test.
Tesla & Nio Will Report Spectacular Earnings.
The Coinbase IPO.
Restore Our Earth on April 22nd (and Every Earth Day).
Should You Sell in May and Go Away? 
Adding Shoot the Moon Performance to Your Nest Egg.
Videoconferencing in a Post-Pandemic World (featuring Zoom & Teladoc).
Sanctuary Sandwich Home. Multigenerational Housing. Interview with Lawrence Yun, the chief economist of the National Association of Realtors. 
10 Budget Leaks That Cost $10,000 or More Each Year.
The Stimulus Check. Party Like It's 1999. 
Kushner's Times Square Building Plunges 80% in Value.
Will There be a Spring Rally?
Cannabis and the Road to Decriminalization in the U.S.
Hot ETFs Return Up to 50% Since October. 
​Investor IQ Test 2021.
Investor IQ Test Answers
​Shoot the Moon Stock Picks
​2021 Crystal Ball.
Would You Pay $50 for a Cafe Latte? Is Your Tesla Stock Overpriced?
Can Medmen Avoid Bankruptcy?
​Bitcoin is Back, Baby!
Real Estate Prices are Going Up. And Down.
Movie Theaters are in Trouble
Airbnb Should Have a Spectacular IPO Today.
​Cannabis is Decriminalized. Stocks Triple.
Airbnb's IPO. Should Hosts Invest?
Gifts Under $5 and Free.
Thanksgiving in a Pandemic. The Sustainability Silver Lining.
Secretary Mnuchin Halts Bailouts
Money Stress Killed My Friend
Real Estate and Housing 2021. Challenges & Opportunities
​Real Estate in a Pandemic. Interview with Mike Fratantoni, the Chief Economist of the Mortgage Bankers Association.
​Bonds are Illiquid & Negative-Yielding.
Annual Rebalancing is a Buy Low, Sell High Plan on Auto-Pilot.
5 Red Flags of a Financial Implosion
Will Regeneron Be Approved Before the Election?
​Tesla Will Have an Outstanding Earnings Report
Should You Wait Until After the Election to Fix Your Wealth Plan?
​The October Surprise
​Is Your Bank a Junk Bond
Do Stocks Fare Better Under Democrats or Republicans?
Put Your Money Where Your Heart Is.
Crystal Ball for the Remainder of 2020 (Including the Election). 
Microcap Gaming Company Doubles 2Q 2020 Revenue.
​Apple & Tesla Stock Splits.
Schwab's Chief Fixed Income Strategist on What's Safe.
China's Tesla (Nio). 2Q Sales Soar.
Why Are You Still Renting? (Errr. There is More Than This to Consider!)
MedMen's Turnaround Plan Attracts A-List Board Members.
​Wealth Myths That Keep You Poor. Prosperity Truths That Make You Rich. 
Protecting Your Wealth and Home in a Recession.
Technology and Silver are Golden.
The Economy Contracts 32.9% in the 2nd Quarter of 2020.
Real Estate: Feeling Equity Rich? Make Sure That Feeling Isn't Fleeting.
Airline Revenue Plunges 86%. 
10 Questions for College Success
Bank Earnings Season. Crimes. Cronyism. Speculation.
Real Estate Solutions for a Post-Pandemic World.
Copper and Chile Update.
Gold Soars. Some Gold Funds Tank. 
Will the Facebook Ad Boycott De-FANG Stocks? 
Why Did My Cannabis Stock Go Down? 
Which Countries Are Hot in a Global Pandemic? 
Is Your Financial Advisor Good at Navigating Stormy Seas?
$10 Avocados, Lies, Damn Lies, Statistics & Wall Street Secrets. 
It's Never a Crash.
Work From Home and Intergenerational Housing.
Biotech Races for a Coronavirus Cure. 
Are You Worried About Money? 
May is a Good Time for Rebalancing.
Is FDIC-Insured Cash at Risk of a Bank Bail-in Plan?
Why Did my Bonds Lose Money?
Cannabis Update. 
Recession Proof Your Life. Free Videocon Monday, May 10, 2020. 
The Recession will be Announced on July 30, 2020. 
Apple Reports Terrible Earnings. 
We Are in a Recession. 
Unemployment, Rising Stocks. What's Going On?
8 Money Myths, Money Pits, Scams and Conspiracy Theories.
21st Century Solutions for Protecting Your Home, Nest Egg & Job.
Wall Street Insiders are Selling Like There is No Tomorrow.
Why Are My Bonds Losing Money?
Tomorrow is Going to be Another Tough Day.
Price Matters. Stock Prices are Still Too High. 
Should You Ride Things Out?
7 Recession Indicators
Corona Virus Update.
The Bank Bail-in Plan on Your Dime.
NASDAQ is Up 6X. 
CoronaVirus: Which Companies and Countries Will be Most Impacted.
Is Tesla Worth GM and Ford Combined.
Artificial Intelligence is on Fire. Is it Time to Buy S'More?
Take the Retirement Challenge.
​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

About Natalie Pace
Natalie Wynne Pace is an Advocate for Sustainability, Financial Literacy & Women's Empowerment. She has been ranked as a No. 1 stock picker, above over 835 A-list pundits, by an independent tracking agency (TipsTraders). The ABCs of Money remained at or near the #1 Investing Basics e-book on Amazon for over 3 years (in its vertical), with over 120,000 downloads and a mean 5-star ranking. The 4th edition of The ABCs of Money was released on October 17, 2020. 

Natalie Pace's easy as a pie chart nest egg strategies earned gains in the last two recessions and have outperformed the bull markets in between. That is why her Investor Educational Retreats, books and private coaching are enthusiastically recommended by Nobel Prize winning economist Gary S. Becker, TD AMERITRADE chairman Joe Moglia, Kay Koplovitz and many Main Street investors who have transformed their lives using her Thrive Budget and investing strategies. Click to view a video testimonial from Nilo Bolden. ​

 
Dr. Sherridan Ross wasn’t ready to take it easy when he retired from medicine. He was, rather, determined to get his hands dirty and clean up some issues at home. Compton, California has a rich history – a past that sleeps in the soil. It’s not that easy to see it today, amidst a farrago of car exhaust, blaring sirens, eye-blight vacant lots and nutrition-deficient fast-food restaurants. Obesity is a crisis in food deserts like Compton. Dr. Sherridan knew that a big piece of the answer was hiding beneath their feet.
 
Compton was once an agricultural mecca of the U.S. It is still today one of the few cities permitted for agriculture – where you can raise horses, chickens and pigs, if you have enough land. When the city was being developed, no one tore up the soil. The houses and concrete were just strewn on top. Dr. Ross, who is a master gardener, knew just how to “wake the soil up,” with something as simple as egg shells (calcium) and banana peels (magnesium). So, he rallied some volunteers, convinced the owner of a vacant lot to come on board, and in just two weekends created the Compton Community Gardens.
 
The Fire Department was the first to sign up for having their own garden beds at the Compton Community Gardens. Locals pay $50 every six months for their own box, which can feed a family of four for that entire period of time. Dr. Ross points out that folks with a yard could get rid of the grass and sow their own lettuce, tomato and zucchini seeds instead… Once you wake up the soil in Compton, you’re in for a rich yield. There are free gardening classes available to get anyone started, regardless of whether they have a bed in the community.
 
Why Gratitude is Important
One of the first things you’ll see when you visit the gardens is that every bed has an empowering message painted on it. Gratitude. Rebirth. Forgiveness. According to TemuAsyr Martin Bey, a Cordon Bleu trained chef who has become an integral partner to the Compton Community Gardens, “We put affirmations all around the garden to create a more positive vibration. Gratitude helps us to operate from a higher place. Once you feel good, it’s easier to do good.”

The Compton Community Gardens team encourages seed sharing and community. They organize volunteers to help with planting and harvesting, and offer ongoing training through their free classes. The Compton Community Gardens have expanded into a second plot and into nine local elementary schools. Kids are learning where their food comes from, and just how delicious fresh produce can be.
 
The Gleaning Beds
The Compton Community Gardens is also dedicated to helping the neighborhood. Though most of the garden beds are rented, there are always “gleaning” beds set aside for the public good. Using Dr. Ross’ companion method, people are harvesting 70 pounds of tomatoes out of one plant in a 4’x 8’ bed – far more than any one family can eat. The food delivered by the Gardens’ volunteers was a Godsend in the pandemic for thousands of families in need, and will continue to play a role in the recovery.
 
Fast Healthy Organic Food
New gardeners are always surprised at just how fast food grows in healthy soil. According to Dr. Ross, a head of lettuce grows to maturity in just 33 days. Zucchini grows four inches a day in the biodynamic Compton soil. Tomatoes that have a strawberry plant next to them don’t suffer from the attack of the tomato hornworm. The guidance of a master gardener makes all the difference. As Dr. Ross told me:
 
We teach people how to grow their garden. Once your garden is growing, you should be able to stand at the end of your garden and not see any soil at all. When you plant a diverse garden, you confuse the insects. Now they don’t get the smell they want to attack your vegetables. You’re cutting down the water by 2/3rds. If the sunlight can’t get to the soil, it can’t dry out the soil. You have to water once or twice a month, instead of once or twice in a week.
 
 
It’s About Much More Than a Garden
Dr. Ross’ vision was to get people eating healthy food and roll back the obesity crisis in his beloved birthplace. He works with teens, not just to give them food, but also to give them hope. Temu believes that fresh, healthy, organic food creates a memory and can actually reduce crime. In fact, the inspiring messages on the garden beds were all painted by local teens, some of which are affiliated with gangs. According to Temu, “Developing a relationship with food helps us to have healthier relationships overall. When you create a healthier life, it’s easier to create a healthy community. This is life-changing. It can revolutionize and uplift our community.” As Temu speaks, someone stops their planting to say, “Amen.” Heads nod in agreement all around the garden, as everyone acknowledges the grander vision and mission of creating health and sanctuary in their city.  
 
 
 
You can learn more about gardening in Dr. Sherridan Ross’ book Introduction to Organic Gardening. Follow The Compton Community Gardens on Instagram to learn when the next volunteer planting or harvesting day will be. (The next Harvest Day is May 28th.) You can support their work by ordering a t-shirt or tote bag at https://www.ComptonCommunityGarden.com/. Click to watch Temu and Dr. Ross discussing the Compton Community Gardens.
 

See more inspiring Earth Gratitude stories on our YouTube channel. Read about conservation and sustainability projects from around the world in the Earth Gratitude free ebooks. 

There are actually two companies that top the charts for 2021. They are providing things that most of us need most right now, which we didn’t concern ourselves at all with a year ago. They are not the only companies doing what they do. However, they are doing it best. Discovering which company is the best in a hot field requires going to the basics of what makes a company great. What is the product? Who are the customers? Why is that company‘s product superior and why does everyone want it more than the competition’s version? Who is leading the company and can the leadership team and Board of Directors continue to produce a superior product and keep the competition at bay?
 
The Product and Customers
When you think of the one thing that everyone is clamoring to get, which none of us cared about a year ago, it’s the coronavirus vaccine. The marketplace is the largest one we’ve ever seen – potentially everyone in the world.
 
The Competition
Many major biotech companies have launched a vaccine. Pfizer and Moderna have a leg up on the competition with FDA approvals and solid distribution. Johnson & Johnson and AstraZeneca have been dogged with production malfunctions, side effects or regulatory concerns. With over 1/3 of U.S. adults vaccinated (or in the process of receiving their 2nd shot), you might think that the party will be over for the companies that are currently approved. However, there is still the rest of the world, and any booster shot that might be needed, which many experts agree is likely.
 
When I was analyzing companies that are competing with the Covid-19 vaccine, I also put in a company that provides Covid testing and companies that are developing immunology and therapeutic solutions for the virus. What I discovered was that the revenue growth of two of the companies on my Stock Report Card was positively eye-popping. Moderna’s revenue increased to $1.9 billion in the 1st quarter, from just $8 million in the year prior – an increase of 23,000%. The company expects to deliver 800 million doses of their vaccine in 2021, with a goal of increasing that to 1 billion. At that level, Moderna’s revenue in 2021 could easily reach the $19.2 billion indicated by the APAs (Advance Purchase Agreements). MSN.com pegs Moderna’s forward price-earnings ratio at just 6.47, which is astonishing for a company with this kind of growth.
 
Fulgent Genetics, makers of a Covid-19 test, along with many other diagnostic tests, saw revenue increase by 4,500% to $359.4 million, with net income of $200.7 million. Fulgent is another company with a very low P/E of just 4.54.
 
Biotechnology Risks
Biotechnology is a very volatile sector. The Covid-19 vaccine came out quickly, without any longitudinal testing. Many folks had already received the Johnson and Johnson vaccine, when they were advised that there was a small risk of blood clotting. If any major health side effects should be revealed and tied to Moderna (or Pfizer), you can expect the stock to drop pretty suddenly. (This makes an investment in Fulgent slightly safer.) The only thing that saves publicly traded biotechs from share price volatility is a preauthorized buyback plan. (That’s what Boeing has done for the past two years to keep its stock high, amidst the multiple problems with their airlines and the airline industry itself.)
 
Immunology
If you might be interested in how the body can be aided in healing itself, then you might be more interested in Regeneron, Adaptive and Vir Biotechnology. These companies all have benefits beyond Covid-19. All of these companies have strong connections to The National Institute of Health and the CDC. Adaptive has partnerships with Amgen and Microsoft, to name a few. Vir Biotechnologies partners include The Gates Foundation. Smaller companies like Vir Biotech and Adaptive Biotechnologies have extreme share price volatility. Vir’s price soared to $140 a share earlier this year. Today’s price is quite a bargain compared to that, if it can reach those heights again. The pipeline, trial results and FDA approvals are what tend to fuel investor interest.
 
3-Ingredient Recipe for Cooking Up Profits
Whether you are interested in Moderna, Fulgent, Vir or Adaptive, after you’ve found your leader, you must then purchase the stock for a good price to make sure that you are on the right side of the trade. There’s no reason to think about price, until you’ve found the leader. (Take the ingredients in order.)
 
3-Ingredient Recipe for Cooking Up Profits

1. Start with what you know and love
2. Pick the leader (using our Stock Report Card® & 4 Questions®)
3. Buy low, sell high (easy to say, hard to do)

 
Price-earnings ratio can be one tool for making sure that you are purchasing for a reasonable price. For instance, Moderna is trading close to an all-time high. However, based upon the 2021 and 2022 sales potential, the price is actually quite low. As more and more headlines emerge about the astonishing revenue growth of Moderna, the price could be pushed up from where it currently is. So, if you try and wait for a better price, it may never come. On the other hand, if there is any problem with the vaccine, then the price could plummet. Biotech offers higher risk, and higher rewards.
 
Fulgent is trading at a 62% discount from the highs set in January of 2021. If you think there will be no need for Covid-19 testing going forward, then Fulgent isn’t the company for you. However, Fulgent is projecting revenue of $830 million this year, which is double last year’s. That’s amazing growth, particularly for a company that is trading at a P/E of 4.54.
 
Companies of the Year
2021’s Company of the Year designation is shared by Moderna and Fulgent. In 2021, the world needs a Covid-19 vaccine. Beyond 2021, we will likely need a booster. We will also continue to need Covid testing, particularly if we want to travel.
 
Regular Rebalancing & Babysitting
Whenever you are investing in an individual company, it requires babysitting. If the company shoots the moon, it’s a very good idea to do a little profit taking and take some gains off the table, just in case there is any kind of bad news down the pike. Here’s where the pie chart system and regular rebalancing can help you. Buy & Hold is not a strategy that has worked in the 21st-Century – not for stocks, gold, crypto or real estate. Proper diversification with regular rebalancing does.
 
The Macro Environment
2021 is predicted to bring 6.5% GDP growth in the U.S. (compared to 8.4% in China). That would usually equate to a stellar year for stocks. However, the recovery is already priced into most stocks. (Moderna and Fulgent are some of the only stocks I’ve seen that are trading at a value). There is a Debt Ceiling debate coming up for the end of July in Congress. Additionally, the U.S. has a negative outlook on their AAA credit rating from Fitch Ratings. A downgrade or Congressional gridlock would be negative for stocks.
 
It’s important to remember that the macro environment can influence the trajectory of any company’s share price. A rising tide lifts all ships. A sinking tide can ground them.
 

Join us for our June 4-6, 2021 Financial Empowerment Retreat. (Click to learn more.) In 3 days, you'll learn how to pick great companies (like Moderna and Fulcrum), and how to incorporate them into a well-diversified wealth plan. You'll discover how to protect your wealth and save thousands annually in your budget with smarter big-ticket choices. The retreat is a complete Money Makeover that will transform your life forever. Bring your friends, family and teens for an unbelievably low group rate. Call 310-430-2397 or email info@NataliePace.com to learn more now. Call 310-430-2397 or email info@NataliePace.com to learn more. 

About Natalie Pace
Natalie Wynne Pace is an Advocate for Sustainability, Financial Literacy & Women's Empowerment. She has been ranked as a No. 1 stock picker, above over 835 A-list pundits, by an independent tracking agency (TipsTraders). The ABCs of Money remained at or near the #1 Investing Basics e-book on Amazon for over 3 years (in its vertical), with over 120,000 downloads and a mean 5-star ranking. The 4th edition of The ABCs of Money was released on October 17, 2020. 

Natalie Pace's easy as a pie chart nest egg strategies earned gains in the last two recessions and have outperformed the bull markets in between. That is why her Investor Educational Retreats, books and private coaching are enthusiastically recommended by Nobel Prize winning economist Gary S. Becker, TD AMERITRADE chairman Joe Moglia, Kay Koplovitz and many Main Street investors who have transformed their lives using her Thrive Budget and investing strategies. Click to view a video testimonial from Nilo Bolden. ​

Almost 5 Million Americans are Behind on Rent & Mortgages, While Home Prices Hit New Highs.
Real Estate: Beyond the Looking Glass.
11 Critically Important Facts to Factor in if You’re Considering Purchasing or Selling Real Estate
 
2.56 million renters and 2.33 million homeowners are behind on their payments (households). Missed rental payments are at about $35 billion, with missed mortgages at about $68 billion. In addition, 41.4% of student debt borrowers (26 million) have missed payments on their college loans, totaling $122.3 billion in missed payments (source: RIHA).
 
The U.S. Treasury has been busy writing checks to try and slow down any foreclosures and evictions. On May 13, 2021, the department announced that $742 million has been distributed to a Homeowner Assistance Fund, while $21.6 billion has been allocated for Emergency Rental Assistance. If you are in need of assistance, click on the blue highlighted links to get additional information. Be aware, however, that the HAF and ERA funds are going to “governmental entities,” not directly to landlords or renters. If you qualify, then you should be able to apply for assistance through your state agency. The new funding came just at a time when the rental and foreclosure moratoria was slated to end on June 30, 2021. (A federal judge threw out the moratoria last week as well.)
 
​We all know someone who is touched by these missed payments. However, the news is telling us that real estate is on fire – creating a thirst for buying among Millennials, who are bidding up already unaffordable home prices. These new bailouts, alongside the moratoria, have kept a massive amount of shadow inventory, all of this distressed property, from hitting the multiple listing services. That would have been devastating to real estate, causing a plunge in prices, which could sink the economy back into a crisis. That is something the Feds, U.S. Treasury and The Administration are all trying to prevent.
 
New homebuyers are simply not factoring the big picture into their decisions, but are being seduced into purchasing at an all-time high from the sexy ads and sophisticated real estate broker/salesmen. Almost 1/3 of purchasers are first-time home buyers (31%). It’s a seller’s market. 

​The high price of real estate is helping with the land value of commercial real estate, even if malls, hotels and office buildings are still largely vacant.
 
Despite what you hear about real estate that puts you in a frenzy to own a new home, it pays to understand what is really going on and to be patient about a purchase that will affect your life for the  next decade or longer. Real estate is not a short-term investment. If you buy high and the price drops, it becomes an illiquid nightmare with octopus arms that reach into every vein of wealth you might have, making your FICO score plunge and draining your nest egg dry. As a warning of how quickly things can head south, a Times Square mixed-use building plunged 80% in value over the last few years.  

​Below are some Beyond the Looking Glass facts and indicators that tell a richer story than what you are seeing and hearing in the mainstream media. Factoring this data into the mix will help you to understand how to navigate your own home and real estate investments, with a view beyond the near-term. Just how could the economy and a general repricing affect your retirement and stock/bond portfolio, in addition to the value of your home?
 
11 2021 Real Estate Facts
 
Landlords are hitting a wall
Renters get another bailout
Intergenerational Housing
Hotels
Malls are turning into Amazon warehouses
Earnings are everything but
Office buildings are incorporating social distancing
Shadow inventory
Exodus
Credit ratings
High price-earnings ratios
 
And here is more color on each point.
 
11 2021 Real Estate Facts
 
Landlords are hitting a wall. Some have had to reduce the rent for struggling tenants. Others have tenants that haven’t paid at all since the pandemic started. The arrears are technically due. However, will the money ever be collected? Can the landlords afford to write off the unpaid rent, or will they lose their property?
 
Renters get another bailout. Renters may qualify for relief. However, many understand this is a short-term fix for housing costs that were unaffordable to begin with. As a result, we’re seeing a dramatic increase in intergenerational housing.
 
Intergenerational Housing. 18% of the homes that Gen Z are purchasing, and 12% overall, are multigenerational homes – pushing up the prices of larger homes. Folks are thinking, while I’m getting an extra room or two for my Work-from-Home office, why not move the parents in (who can help out with the mortgage)? Vice-versa, when a young professional gets behind, their first call might be to the parents for room at the inn until the financial trouble subsides. As you can see in the chart below, intergenerational housing has hit a record high – higher than it was during the Great Depression (another time of necessity).
 

Hotels. Hotels are hoping for a renaissance in the 2021 summer vacation market. Others are remodeling to become multi-unit housing. In the meantime, revenue was down by 50% or more in many casinos and hospitality/travel companies. Despite that fundamental weakness, many companies are trading near their all-time highs and unsustainably high prices. Booking Holdings (Priceline) has a 65 forward price-earnings ratio, while Las Vegas Sands Corp’s P/E is 389.
 
Malls are turning into Amazon warehouses. Amazon has been buying up empty malls and turning them into fulfillment centers. The concept has struggling mall REITs, like Simon Property Group, trading near 52-week highs, though revenue is still down (and being propped up by earnings that are everything but sales).
 
Earnings are everything but
When S&P Global downgraded Cushman & Wakefield from BB- to B+ on March 21, 2021, the note included a revealing fact. “The majority of the company's EBITDA came from add-backs for interest expense ($197.6 million) and depreciation and amortization ($263.6 million), which we view as lower quality compared with core earnings,” S&P reported. Office buildings and malls are vacant and empty, so how are they reporting earnings at all? The answer lies in add-backs and other financial engineering. In other words, be careful about investments in REITs and other distressed property that is undergoing a structural shift in its business model.

Office buildings are incorporating social distancing. Work-from-Home and the pandemic changed the business model for office buildings overnight, and look to be a structural shift going forward. Salesforce’s President Brent Snyder announced on February 9, 2021, that ”the 9-to-5 workday is dead.” According to Snyder, most of their staff will work remotely or “flex,” coming into the office only 1-3 days/week for “team collaboration, customer meetings and presentations.” This “work-from-anywhere model” means that Salesforce will be able to reduce its real estate footprint. I reported on this more in depth while I was in New York City in March. Click to read that blog.  
 
Shadow inventory. According to AttomData, 1/3 of mortgaged homes are considered to be equity-rich. (If this describes you, be sure to read my Equity-Rich blog, to be sure you can withstand a world where housing takes a downward spiral.) However, 2.6 million homes are also severely underwater (where the loans are 25% higher than the home value). 2.3 million households are behind on their mortgage, with probably some cross-over in the two.
 
This distress is not showing up on the MLS. However, these homes are vulnerable to foreclosure and auction. (If you’re in this position, contact our office at info@NataliePace.com or 310-430-2397 for some key information that might save your life boat.) Patient home buyers who purchase in the shadow inventory, where prices can be discounted by up to 1/3, will find better bargains than those relying solely upon a broker-salesman.

Exodus. California’s population fell by 182,000 in 2020, costing it one Congressional seat. New York City’s population fell by 108,000 in 2020. Sadly, part of the drops were due to COVID-19 deaths. However, unaffordable housing costs in both areas are pushing residents to more affordable areas, particularly now that employers have become more flexible with working from home. Areas like Sacramento and Modesto have attracted former San Francisco residents, according to Lawrence Yun.
 
​Credit ratings. REIT investors should be alerted that many have very high debt and very low credit scores. Companies in junk bond status include: Cushman & Wakefield, Wynn Resorts and Beazer Homes, among many others.
 
High price-earnings ratios.
Revenue growth in 2021 could start to look good even for severely distressed companies, simply because it’s not difficult to look better than 2020 – the worst year, economically speaking, of our lifetime. 2021 is projected to produce the best year in decades, with 6.4% GDP growth. However, this is already priced into the stock market. The forward outlook for price-earnings ratios are historically high…
 
As you can see in the chart below, the only two times in history when price-earnings ratios have been this high were before the Dot Com Recession (2000) and before the Great Depression (1929). Now would be a good time to know exactly what you own in your managed brokerage account and your retirement account, and to be sure that you are comfortable with the amount of risk that you have.

Bottom Line
There has been a massive, historic effort by the U.S. Treasury and the Federal Reserve Board to keep prices of real estate and stocks right where they are. This has resulted in the bull market we are enjoying in both markets, even while the economic fallout of the pandemic is still swirling in the clouds, soil and shadow inventory. 
 
In the short-term, if you purchase a home or any real estate right now, it might look like you are a genius. However, buying high in any hard asset can be a decades-long nightmare. Here are a few key strategies that should pay off.

• Be a patient buyer,
• Shop in the shadow inventory,
• Have a vision of what works over a 10-year period (or beyond),
• Do the math. Thrive Budget for your own home; your own P&L if it’s to be a business,
• Be aware of the 4 Ds of real estate – disaster (and pandemics), divorce, death and depression,
• Think bigger on how you might monetize your home with multigenerational housing or room-mates,
• Every soul has her own geography. Be sure that you can create a sanctuary home in any locale you’re considering relocating to.

 
Also, read the Real Estate Blogs & Interviews below.
 
Interview with Lawrence Yun, the Chief Economist of the National Association of Realtors
Blog
Videoconference

Times Square Building Plunges 80% in Value

Real Estate Prices are Going Up

Real Estate Challenges & Opportunities

Real Estate: Feeling Equity-Rich?

Real Estate Solutions


​We spend one full day mastering time-proven real estate investment strategies, including income-producing property, at the Financial Empowerment Retreat June 4-6, 2021. Join us!

Join us for our June 4-6, 2021 Financial Empowerment Retreat. (Click to learn more.) In 3 days, you'll learn how to pick great companies (like Beyond Meat, The Very Good Food Co., Oatly, Zoom Video, Tesla, Aphria, Veritone and Nio), and incorporate them into a well-diversified wealth plan. You'll discover how to protect your wealth and save thousands annually in your budget with smarter big-ticket choices. The retreat is a complete Money Makeover that will transform your life forever. Bring your friends, family and teens for an unbelievably low group rate. Call 310-430-2397 or email info@NataliePace.com to learn more now. Get the best price when you register by Saturday, May 15, 2021. Call 310-430-2397 or email info@NataliePace.com to learn more. 

Other Blogs of Interest
​Beyond Meat, Oatly & The Very Good Food Co. 
Is Cryptocurrency the New Gold?
Rebalancing Your Nest Egg IQ Test.
Answers to the Rebalancing Your Nest Egg IQ Test.
Tesla & Nio Will Report Spectacular Earnings.
The Coinbase IPO.
Restore Our Earth on April 22nd (and Every Earth Day).
Should You Sell in May and Go Away? 
Adding Shoot the Moon Performance to Your Nest Egg.
Videoconferencing in a Post-Pandemic World (featuring Zoom & Teladoc).
Sanctuary Sandwich Home. Multigenerational Housing. Interview with Lawrence Yun, the chief economist of the National Association of Realtors. 
10 Budget Leaks That Cost $10,000 or More Each Year.
The Stimulus Check. Party Like It's 1999. 
Kushner's Times Square Building Plunges 80% in Value.
Will There be a Spring Rally?
Cannabis and the Road to Decriminalization in the U.S.
Hot ETFs Return Up to 50% Since October. 
​Investor IQ Test 2021.
Investor IQ Test Answers
​Shoot the Moon Stock Picks
​2021 Crystal Ball.
Would You Pay $50 for a Cafe Latte? Is Your Tesla Stock Overpriced?
Can Medmen Avoid Bankruptcy?
​Bitcoin is Back, Baby!
Real Estate Prices are Going Up. And Down.
Movie Theaters are in Trouble
Airbnb Should Have a Spectacular IPO Today.
​Cannabis is Decriminalized. Stocks Triple.
Airbnb's IPO. Should Hosts Invest?
Gifts Under $5 and Free.
Thanksgiving in a Pandemic. The Sustainability Silver Lining.
Secretary Mnuchin Halts Bailouts
Money Stress Killed My Friend
Real Estate and Housing 2021. Challenges & Opportunities
​Real Estate in a Pandemic. Interview with Mike Fratantoni, the Chief Economist of the Mortgage Bankers Association.
​Bonds are Illiquid & Negative-Yielding.
Annual Rebalancing is a Buy Low, Sell High Plan on Auto-Pilot.
5 Red Flags of a Financial Implosion
Will Regeneron Be Approved Before the Election?
​Tesla Will Have an Outstanding Earnings Report
Should You Wait Until After the Election to Fix Your Wealth Plan?
​The October Surprise
​Is Your Bank a Junk Bond
Do Stocks Fare Better Under Democrats or Republicans?
Put Your Money Where Your Heart Is.
Crystal Ball for the Remainder of 2020 (Including the Election). 
Microcap Gaming Company Doubles 2Q 2020 Revenue.
​Apple & Tesla Stock Splits.
Schwab's Chief Fixed Income Strategist on What's Safe.
China's Tesla (Nio). 2Q Sales Soar.
Why Are You Still Renting? (Errr. There is More Than This to Consider!)
MedMen's Turnaround Plan Attracts A-List Board Members.
​Wealth Myths That Keep You Poor. Prosperity Truths That Make You Rich. 
Protecting Your Wealth and Home in a Recession.
Technology and Silver are Golden.
The Economy Contracts 32.9% in the 2nd Quarter of 2020.
Real Estate: Feeling Equity Rich? Make Sure That Feeling Isn't Fleeting.
Airline Revenue Plunges 86%. 
10 Questions for College Success
Bank Earnings Season. Crimes. Cronyism. Speculation.
Real Estate Solutions for a Post-Pandemic World.
Copper and Chile Update.
Gold Soars. Some Gold Funds Tank. 
Will the Facebook Ad Boycott De-FANG Stocks? 
Why Did My Cannabis Stock Go Down? 
Which Countries Are Hot in a Global Pandemic? 
Is Your Financial Advisor Good at Navigating Stormy Seas?
$10 Avocados, Lies, Damn Lies, Statistics & Wall Street Secrets. 
It's Never a Crash.
Work From Home and Intergenerational Housing.
Biotech Races for a Coronavirus Cure. 
Are You Worried About Money? 
May is a Good Time for Rebalancing.
Is FDIC-Insured Cash at Risk of a Bank Bail-in Plan?
Why Did my Bonds Lose Money?
Cannabis Update. 
Recession Proof Your Life. Free Videocon Monday, May 10, 2020. 
The Recession will be Announced on July 30, 2020. 
Apple Reports Terrible Earnings. 
We Are in a Recession. 
Unemployment, Rising Stocks. What's Going On?
8 Money Myths, Money Pits, Scams and Conspiracy Theories.
21st Century Solutions for Protecting Your Home, Nest Egg & Job.
Wall Street Insiders are Selling Like There is No Tomorrow.
Why Are My Bonds Losing Money?
Tomorrow is Going to be Another Tough Day.
Price Matters. Stock Prices are Still Too High. 
Should You Ride Things Out?
7 Recession Indicators
Corona Virus Update.
The Bank Bail-in Plan on Your Dime.
NASDAQ is Up 6X. 
CoronaVirus: Which Companies and Countries Will be Most Impacted.
Is Tesla Worth GM and Ford Combined.
Artificial Intelligence is on Fire. Is it Time to Buy S'More?
Take the Retirement Challenge.
​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.
​

About Natalie Pace
Natalie Wynne Pace is an Advocate for Sustainability, Financial Literacy & Women's Empowerment. She has been ranked as a No. 1 stock picker, above over 835 A-list pundits, by an independent tracking agency (TipsTraders). The ABCs of Money remained at or near the #1 Investing Basics e-book on Amazon for over 3 years (in its vertical), with over 120,000 downloads and a mean 5-star ranking. The 4th edition of The ABCs of Money was released on October 17, 2020. 

Natalie Pace's easy as a pie chart nest egg strategies earned gains in the last two recessions and have outperformed the bull markets in between. That is why her Investor Educational Retreats, books and private coaching are enthusiastically recommended by Nobel Prize winning economist Gary S. Becker, TD AMERITRADE chairman Joe Moglia, Kay Koplovitz and many Main Street investors who have transformed their lives using her Thrive Budget and investing strategies. Click to view a video testimonial from Nilo Bolden. ​

The plant-based protein market is steadily growing. In 2019, global sales were $17.2 billion. By 2027, vegan meat substitutes and plant-based protein liquids (like Oatly) are projected to ring up almost $28 billion in sales. While Beyond Meat® and Impossible® were the pioneers in vegan burgers, Canada’s The Very Good Company is gaining traction with its savvy branding and chef-inspired recipes. Even old-school food makers like Kellogg, Conagra, Archer Daniels and Midland and Dupont Food are all showing up at the party. So, which is the best horse to bet on?
 
Oatly is launching its U.S. IPO with $421 million in sales and a global footprint. The Very Good Food Company, which started in Canada and is expanding into the U.S., is lapping the competition in revenue growth. 2020 revenue was $3.8 million (U.S.), up 364% year over year. Beyond Meat enjoys partnerships with large restaurant chains, and one hundred times the sales of the Very Good Company, at $407 million in 2020.
 
Below is a more detailed examination of the strengths and weaknesses of:

• Beyond Meat,
• The Very Good Food Company,
• Oatly, and,
• The old-school food providers that are leaping over themselves to join the plant-based protein party.

 
Beyond Meat
Beyond Meat has great partnerships. It has shelf space at major food retails, like Whole Foods, Kroger, Sprouts, and Target, and branded fare at fast food chains, like Carl’s Jr. and McDonald’s McPlant menu. With all of those marquise partnerships, why in the world did the market value of Beyond Meat just drop by half, to a 52-week low of $103/share (on May 10, 2021)?
 
Retail was up a respectable 28% in the 1st quarter, compared to the same quarter a year ago. However, Beyond Meat’s food service vertical (fast food) was down 26%. Beyond Meat’s CEO Ethan Brown cited COVID-19 as the cause for the weakness in food services. In the 1st quarter of 2021, people were still more comfortable cooking at home. With the vaccine roll-out and more states opening up, there is cautious optimism that the food service vertical will come back. Meanwhile, the company’s focus is on building out the production infrastructure needed for continued expansion in the U.S., the EU and China.
 
Beyond Meat’s shares were trading above $200/share in late January of this year. While it’s easy to blame the tepid 2.7% year-over-year revenue growth in the 1st quarter for the share price plummet, the core cause is more likely insider selling. The insiders of Beyond Meat have been on a selling spree since the company hit the January 2021 high. This is something to be wary of with The Very Good Food Company, too. Insiders are always going to be tempted to sell into strength, to turn some of their wealth on paper into usable currency – particularly after the pandemic scare.
 
Beyond Meat has $1.1 billion cash on hand (as of April 3, 2021). One billion dollars worth of bond buyers were willing to bet on the price of Beyond Meat more than doubling. They are receiving no interest, but will be able to convert to shares at approximately $206/share in 2027.
 
Beyond Meat has $1.1 billion cash on hand (as of April 3, 2021). One billion dollars worth of bond buyers were willing to bet on the price of Beyond Meat more than doubling just two months ago, on March 2, 2021. They are receiving no interest, but will be able to convert to shares at approximately $206/share in 2027.

​The Very Good Food Company (TSXV: VERYV) (OTCQB: VRYYF) (FSE: 0SI)
Anytime you see sales/revenue growth of 364%, it is positively eyepopping, particularly when the most recognized brands, like Beyond Meat, are flatlining. So, how is The Very Good Food Company achieving such feats? According to CEO Mitchell Scott in the 4Q 2020 earnings report, The Very Good Food Company’s “eCommerce channel demonstrated an 825% increase in online orders,” while “retail distribution points [grew] from 100 to 1,300.” The company has a very smart social networking strategy in place. The minute the company name came up on my radar (from a WhatsApp text), I started getting ads on my Instagram account. The sassy approach to branding is quite appealing, too.

This year, The Very Good Company purchased the Cultured Nut and will rebrand this popular artisanal nut cheese as The Very Good Cheese Co. On May 6, 2021, the company signed a distribution deal with United Natural Foods to distribute their products in the U.S. UNFI is the largest publicly traded wholesale distributor of health and specialty food in North America. This deal expands the partnership the two companies began in Canada in the 4th quarter of 2020.

The addition of The Very Good Cheese Co., UNFI distribution, and a new production facility in California, to expand into the U.S. market, bodes well for continued rocket-like revenue ascensions.
 
The only downside to an investment now in The Very Good Food Company is that the share price is even more astronomical than the revenue growth. The company soared from 57 cents to $7.43 after its public listing in Canada. (It trades off the boards in the U.S.) You might think that the current price of $3.69 is a pretty good deal, until you realize that the company’s market value is $434 million, while the annual revenue is under $4 million. Last year’s net loss was $11.42 million. The Very Good Food Company is valued at 112 price-to-sales ratio, compared to Beyond Meat’s price-to-sales ratio of 17. Both companies are still in the red – ramping up production to meet increasing demand.
 
With the whirlwind of acquisitions and distribution deals, it’s certainly possible that The Very Good Food Company grows beyond its current valuation, without ever dipping. However, that bet is a gamble, particularly when insiders might be tempted to cash in some of their paper gains.
 
Oatly
Oatly is another company with astonishing revenue growth. Sales doubled in the most recent quarter compared to the prior year. Oatly has oatmilk, yogurt and ice cream, making these popular delights available to the lactose-intolerant, as well as those folks who want a lower carbon footprint. You can buy Oatly in grocery and drug stores around the world. 64% of Oatly’s revenue comes from EMEA, with 24% in North America and 13% in Asia. (Oatly is based in Sweden.)
 
According to Oatly’s website, “Oatly exists in order to help as many people as possible make the switch from an animal-based diet to plant-based, which scientists say is one of the most effective actions an individual can take right now to save our planet.” If you’re a fan of Oatly’s products and mission, chances are you’re going to want to own the stock. The only real question is, “Is the price right?” Should you buy now, or wait for a better bargain?
 
Once Oatly announces its price offering and hits the big boards, it will be easier to determine if the price is a deal or too lofty. The F-1 IPO filing is missing a few key elements, such as board members. It warns that Oatly may be a “controlled company” that doesn’t have to adhere to all of the rigors of most publicly-traded companies, such as boards. Another potential red flag for investors (not for customers) is that the company has lost money for several years, with $60.4 million and $35.6 million lost in 2020 and 2019, respectively. Oatly, like Beyond Meat and The Very Good Company, is investing in expansion – like many younger, popular companies (such as Nio and Tesla). Any kind of supply disruption with oats would be catastrophic.

Old-School Food Providers
Plant-based cuisine is only a small piece of the old-school food manufacturers, like Conagra, Kellogg, Tyson, Archer Daniels and Midland and Dupont. Food manufacturing tends to be a very low-margin business, with predictable sales. As such, many of these century-old companies have flat revenue growth, and are carrying a substantial load of debt. Whereas the three plant-based protein leaders listed above are borrowing money to keep up with surging demand of their innovative products, most of the old-school food manufacturers have borrowed money to pay dividends and buy back their own stock (financial engineering). Conagra is rated BBB-, Kellogg is BBB, Tyson is BBB+. BBB is the lowest rung of investment grade before the company becomes speculative (a junk bond).
 
Bottom Line
Investing in Beyond Meat at today’s price is a 50% discount from where the company traded in January of this year. The Very Good Food Company is still trading at a very lofty price, even with a 50% discount off the high. Oatly’s price might be delicious. We’ll just have to open up the package once it hits the big boards to see. (Stay tuned to my Twitter feed for an update, as the pricing and the public listing are announced.)
 
Beyond Meat’s share price rollercoaster ride is an example of why regular rebalancing is key to successful investing in the 21st-Century. (Click to get more information on how to rebalance regularly in your wealth plan.) Rebalancing works. Market timing rarely does.
 
Full Disclosure: I own shares of Beyond Meat.                            
 
 
Join us for our June 4-6, 2021 Financial Empowerment Retreat. (Click to learn more.) In 3 days, you'll learn how to pick great companies (like Beyond Meat, The Very Good Food Co., Oatly, Zoom Video, Tesla, Aphria, Veritone and Nio), and incorporate them into a well-diversified wealth plan. You'll discover how to protect your wealth and save thousands annually in your budget with smarter big-ticket choices. The retreat is a complete Money Makeover that will transform your life forever. Bring your friends, family and teens for an unbelievably low group rate. Call 310-430-2397 or email info@NataliePace.com to learn more now. 

Other Blogs of Interest
Is Cryptocurrency the New Gold?
Rebalancing Your Nest Egg IQ Test.
Answers to the Rebalancing Your Nest Egg IQ Test.
Tesla & Nio Will Report Spectacular Earnings.
The Coinbase IPO.
Restore Our Earth on April 22nd (and Every Earth Day).
Should You Sell in May and Go Away? 
Adding Shoot the Moon Performance to Your Nest Egg.
Videoconferencing in a Post-Pandemic World (featuring Zoom & Teladoc).
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The Stimulus Check. Party Like It's 1999. 
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Would You Pay $50 for a Cafe Latte? Is Your Tesla Stock Overpriced?
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​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

​

About Natalie Pace
Natalie Wynne Pace is an Advocate for Sustainability, Financial Literacy & Women's Empowerment. She has been ranked as a No. 1 stock picker, above over 835 A-list pundits, by an independent tracking agency (TipsTraders). The ABCs of Money remained at or near the #1 Investing Basics e-book on Amazon for over 3 years (in its vertical), with over 120,000 downloads and a mean 5-star ranking. The 4th edition of The ABCs of Money was released on October 17, 2020. 

Natalie Pace's easy as a pie chart nest egg strategies earned gains in the last two recessions and have outperformed the bull markets in between. That is why her Investor Educational Retreats, books and private coaching are enthusiastically recommended by Nobel Prize winning economist Gary S. Becker, TD AMERITRADE chairman Joe Moglia, Kay Koplovitz and many Main Street investors who have transformed their lives using her Thrive Budget and investing strategies. Click to view a video testimonial from Nilo Bolden. ​

Is cryptocurrency the new gold?
  
When Boomers are worried about a weak dollar or the U.S. economy being buried in debt, they think of gold as a hedge. Gen Z and Millennials get excited about cryptocurrency – peer-to-peer money that bypasses banks. When Jerome Powell compared cryptocurrency to gold this year (multiple times), his rationale is that both are vehicles for speculation. Cryptocurrency, like gold, is not being used to pay for things. Yes, theoretically you can buy a Tesla with Bitcoin, and secure, peer-to-peer monetary transactions could indeed take hold in the future. However, when word on the street is that Bitcoin is going to hit $100,000/coin or a million a coin, the heart of that hyperbole is the hope of getting rich quick. Speculation.

Tesla was by far the hottest investment of 2020, rising more than 8-fold on the year. Bitcoin almost quadrupled. Gold scored a respectable gain of 22.3%.
 
2021 saw Bitcoin soar even higher. The coin hit $64,899 on April 13, 2021, and is currently at $54,905. The volatility in crypto is not for the faint of heart. (See below when we discuss the Crypto Crash of 2018.)
 
All cryptocurrencies are not created equal. Some were created as a joke (Dogecoin). Others are out and out scams (those #WallStreetBets crypto schemes, MLM coin clubs, and Joff Paradise and his Trade Coin Club scam, which I warned of in my blog of June 25, 2017). Some are run by executives who have been in trouble with the SEC in previous ventures (Ripple XRP).

Also, since crypto is a traders’ paradise right now – and is not being used as currency – it’s important to apply tried and true investing strategies. Buying high, hoping to sell higher, is rarely a good idea. The Buy and Hold strategy wiped out crypto investors just a few years ago. It’s easy to lose sight of the lessons of the past (the very recent past) when stocks and crypto are trading at all-time highs. However, it’s better to be sobered up by data and statistics than by reality.
 
Elon and Jack
Bitcoin‘s most recent surge has a lot to do with Elon Musk and Jack Dorsey. Both have gotten behind Bitcoin in big ways. When they added the Bitcoin symbol to their Twitter profiles, popularity in Bitcoin began to soar. Jack has 5.3 million followers; Elon has 52.7 million. (The symbol is no longer in Elon’s profile, but is still on Jack’s.)

On March 15, 2021, Tesla’s CFO Zach Kirkhorn added the title Master of Coin to his CFO standing. (Elon became the Technoking.) Tesla has begun accepting Bitcoin in the U.S. (but not Bitcoin fork products, like Bitcoin Cash or Bitcoin SV).

In 2020, Square’s 2020 total net revenue was $9.5 billion, more than double that of 2019. If you exclude Bitcoin revenue, the total drops to $4.93 billion – a mere 17% increase over 2019. Square enjoyed a $4.6 billion revenue bump by offering Bitcoin to its Cash App customers. Since the company has to purchase Bitcoin in order to sell it, there isn’t a great deal of profit yet. Square’s Bitcoin costs in 2020 were $4.47 billion. According to the Square 4Q 2020 Shareholder Letter, “In January 2021, more than one million customers purchased Bitcoin for the first time.”
 
Both Tesla and Square claim to be Bitcoin believers for the long run. However, Tesla sold 10% of its holdings, according to an Elon Tweet on April 26, 2021. Both Square and Tesla also acknowledge that if the price of Bitcoin goes down, they will be forced to take a charge. Value of investments must reflect the current market fair price, according to accounting rules. If the price of Bitcoin falls as precipitously as it did in 2018, or if a downtrend starts developing, both companies might decide to do a little profit-taking, while the getting is good – in order to avoid a massive, devastating write-down. CFOs are in charge of liquidity, ROI and good earnings reports. Having a large markdown won’t please their shareholders.

On face value, you might think that with the support of Square and Tesla, Bitcoin almost has to stay high. However, with Bitcoin’s trillion-dollar market value, Tesla and Square investments are a smaller piece of the pie. There are many hedge funds, private equity and even venture capital funds that are invested in Bitcoin. Finance geniuses are well aware that making a return on investment involves selling to capture your gains. No one wants to be caught holding the bag. So, once a whale starts selling, the knife drop can slice rather quickly, which is exactly what happened in 2018, and in April when Bitcoin dropped by $10,000/coin. The April 2021 Bitcoin rally to $64,899/coin was led by retail traders (Main Street), with whales taking profits, according to Coindesk.
 
The Crypto Crash of 2018
Bitcoin ballooned to a value of $20,000 in December 2017. Within two short months, the coin crashed by 60%. At the end of the year, it was down more than 80% making the correction worse than the Dot Com crash (of -78%). No one stepped forward to claim that they were the ones who pocketed all the gains. However, a crash of that magnitude inevitably involved the whales. The individual Main Street investor is the one who typically gets caught on the wrong side of the trade. Many Bitcoin millionaires were destroyed in 2018. An online search should reveal some pretty heartbreaking tragedies (and, sadly, suicides). That’s why it’s very important to adhere to a time-proven system for investing when you are considering a crypto trade in 2021.
 
Invest Within Reason
Volatility is one of the reasons why it’s a good idea to think of cryptocurrency investments as a slice of your wealth strategy and not the whole banana. If you really believe in Bitcoin or another coin, then mock up a sample pie chart using my free Nest Egg Pie Chart web app. (Email info@nataliePace.com with Web App in the subject to receive links to it.) Consider investing a couple of the hot slices in the cryptocurrencies you most believe in. If the coin shoots the moon, and your slice becomes ten slices, it is prompting you to sell high. (Keep a slice or two if it’s still hot.) If the coin drops in price and you still believe in it, you are prompted to buy more at a lower price. Learn more about nest egg rebalancing in this Nest Egg IQ Test.

Crypto Criminals
Be very wary of any cryptocurrency investment tips that you receive by email or as a hot tip from a friend. Grade your guru before you listen to anything they say. (Click to read a blog on why this is imperative.) Whenever any asset or industry gets hot, the thieves and rats crawl out of the woodwork. They will try to hide their predatory nature in the cloak of something that really appeals to you – like an investment you’re infatuated with or a brand you believe in. If someone is demanding that you act now or miss out on the opportunity, that’s a common hard-sell technique. If the amount that you’re offering to invest is too small and they say you have to up the commitment because they’re already making an exception for you, same thing. Big red flag.

Dogecoin
This is a coin that started out as a joke. The creator was active in warning against speculative trading in cryptocurrencies, and is no longer a part of the company. He now works for Adobe. (Click to see an interview from 2018 with Jackson Palmer.)
 
Elon purchased Dogecoin for his one-year-old son on February 10, 2021 (according to his Tweet) and is promising Dogefather will appear on SNL on May 8, 2021. Mark Cuban also purchased some Dogecoin for his son. All of that press made Dogecoin the top mover in crypto trades today. The coin hit a high of $0.57, after starting at 7 cents before Elon’s Feb. 10, 2021 Tweet.

Be careful with this coin because it is a meme stock. Many meme stocks have the parabolic arc of a shooting star. Always choose a reputable platform, such as Coinbase, for your crypto trading and wallet. Therein lies another problem. Dogecoin hasn’t met the criteria to begin trading on Coinbase’s crypto platform.

What is Currency?
Currency is essentially a promise. Any promise is only as good as the person making it. We’ve seen crypto criminals who tried to entice investors in by saying their crypto would be backed by gold. MLM Bitcoin clubs tout the slick words of serial scam artists. Venezuela launched a coin that was backed by oil. Since their economy wasn’t stable, the coin faltered. China has launched a coin. Most of the world still uses fiat currencies, with the U.S. dollar still the dominant currency in the basket of currencies that have become the world’s reserves.

​Crypto 2021 is a Trading Platform
As mentioned at the beginning of this blog, currently investors are interested in cryptocurrency as a way to get rich quickly. That’s not a currency.
 
Buy Low, Sell High
The investing commandment of buy low, sell high is easy to say, but hard to do. It’s hard to decline the invitation to the party when you see Bitcoin rocketing from a low of $5,000/coin in March of 2020 to $54,900 today. It’s equally hard to say, “I see opportunity,” when crypto crashes, as it did in 2018. And that is why a simple pie chart diversification strategy can be very beneficial and useful. The other benefit is that if you take profits off the table when the price soars, you’ll be emotionally prepared to buy more, and will have the cash on hand to do just that, when/if crypto crashes again.
 
Bottom Line
Cryptocurrency is the new gold for Gen Z and Millennials. Bitcoin was definitely the hottest investment in 2020 (behind Tesla) and could be in 2021, too, if we don’t have a crypto crash like 2018.
 
Now that people can buy a Tesla with their Bitcoin, and there are a number of nascent Bitcoin millionaires, the trend toward further adoption of peer-to-peer exchange via crypto could be on its way. (There is still an issue of the amount of energy it takes to produce a Bitcoin.) Mass adoption doesn’t mean that Bitcoin can be worth millions of dollars per coin, however. (That’s a speculative trading bubble, not a stable currency.)
 
In 2021, there will be a tightrope between traders who want to lock in gains and newbie investors who are late to the party and are willing to buy high. Newbies are always at great risk for being on the wrong side of the trade.
 
Each currency must be forensically examined to ensure that it is a coin, company and team that is worthy of your trust. Meme stocks rarely are. Musk and Mark Cuban have a few bucks they can lose, while teaching their kids a lesson about investing.
 
 
Join us for our June 4-6, 2021 Financial Empowerment Retreat. (Click to learn more.) In 3 days, you'll learn how to pick great companies (like Zoom Video, Tesla, Aphria, Veritone and Nio), incorporate them into a well-diversified wealth plan, receive a complete Money Makeover and transform your life forever! Bring your friends, family and teens for an unbelievably low group rate. Call 310-430-2397 or email info@NataliePace.com to learn more now.