Necessity begets stability

Necessity begets stability
The case for grocery-anchored real estate investing
OCT 09, 2018
Coming out of the financial crisis, advisers could only dream of a nine-year bull market. Its reality now keeps most up at night. The equity market's current run is one of its longest in history. It's also one of the strongest, with the S&P 500 Index up more than 300% from its 2008 nadir.1 Heady returns have placed stock valuations in the highest echelon of historical ranges, leaving experts pondering when the market cycle will take its next natural turn. Against this backdrop, advisers are searching for downside protection and stability within clients' portfolios while also generating and growing the income that investors need for their retirement. The search is challenging. Historically low bond yields suggest fixed income will provide little protection against the next downturn for stocks. Other asset valuations are also elevated. The search for stability must press on, however. Large swaths of the population are at critical tipping points in their investment journeys. Baby boomers can't afford to see their savings wiped out as they leave the workforce. This generation needs to preserve capital and find stable sources of retirement income. Low bond yields make their needs harder to address. Bonds also lack the tax efficiency and growth of investments in real estate. Millennials, meanwhile, are in the nascent stages of investing. An early downturn could discourage young investors, pushing them to the sidelines before the next rebound and leaving their nest eggs in a perpetual state of catch-up, magnified by the fact that we are living longer in retirement. While long-term investors should maintain allocations to assets that can weather a market downturn – or even grow through it – the current climate makes the need more pressing and the search more difficult. Advisers may still find durable investment opportunities, however, by considering clients' most basic needs. One potential solution is grocery-anchored real estate investment options. In our white paper, we explore this topic in more detail, but key takeaways and noteworthy considerations for advisers include:
  1. Low bond yields and stretched equity valuations underscore the need for stability within client portfolios.
  2. Baby boomers and millennials are at investment crossroads that make stability even more paramount.
  3. Grocery store revenues have proven resilient through economic cycles, even growing during recessions.
  4. Grocery-anchored REITs provide steady, moderately growing income for investors, in large part because of the necessity-based nature of grocers and other retailers within the properties.
CLICK HERE TO DOWNLOAD THE REPORT

Latest News

Vanilla locks in US patent for estate planning tech, strengthening advisor reach
Vanilla locks in US patent for estate planning tech, strengthening advisor reach

The wealth tech platform says its newly secured patent represents crucial advances in digitizing outdated manual processes.

Wealth managers weigh in on Trump's potential order to open 401(k) plans to alternatives
Wealth managers weigh in on Trump's potential order to open 401(k) plans to alternatives

Financial advisors offer their thoughts on the President's widely anticipated executive order to open retirement accounts to private market assets.

SEC: First Liberty misused fresh investor money in $140 million scheme
SEC: First Liberty misused fresh investor money in $140 million scheme

The SEC says First Liberty lured investors with high-yield promissory notes, then used fresh cash to cover defaults and interest owed to earlier investors.

SEC hits pause on Bitwise ETF offering broad crypto exposure
SEC hits pause on Bitwise ETF offering broad crypto exposure

The agency's decision to stay the approval process just hours after signing off highlights ongoing ambiguity for new crypto-focused ETF offerings.

Advisor moves: LPL swipes veteran advisors from Wells Fargo, Lincoln Investment
Advisor moves: LPL swipes veteran advisors from Wells Fargo, Lincoln Investment

Meanwhile, Cetera has boosted its own recruitment numbers with new additions from LPL and Osaic.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.