Understanding rate hikes

Market Update

JUN 25, 2022

For a lot of us, our personal story of achieving independence is usually the same as our story of giving up codependency. In 2016, I learnt that other people were not responsible for my emotional state — regardless of how close we were. Granted, big realizations like this usually happen at inflection points our lives but the conclusion is the same: I’m responsible for my everything, how I process, digest, react, etc. You’ll realize something similar if you’ve ever created any form of public content before.

Take this blog for instance, no-one can really help me with my writing. It’s unique (agonizing) and others can help edit, proof-read, & critique — but if I don’t write, the words won’t birth. I suppose that’s how most things ought to be, self-actualized from the creator herself.

Although the last few weeks have been busy, they’ve been good busy. I was finally able to close on my first transaction as an agent, and have been making progress on marketing myself — starting with my brand platform. There are days where I’ll lift my head up from the busywork to ask whether I’m on track for my main goal: acquiring my first apartment building.

It’s been a struggle.

Because I’ve been in survival mode for the last 6 months, I’ve gotten ruthless with my list of priorities — as well as my tolerance for non-value interactions. I find myself struggling with balancing the short term focus on agent-related activities (open houses, showings, cold calling, etc.) vs. my long term vision. I don’t think anyone truly has it figured out, but rather that different chapters of life require long & short distance focus shifting. I’m in the survival chapter now, focused on not drowning.

As an example of how efficient I’ve started to grow, I fired my first client this week. Yes that’s correct, a client that would have paid me $10k+. My client, C, had initially started our working relationship just fine, but over the last few weeks it’s spiraled into unrealistic expectations and condescending language. For the most part, I understand if people are stressed — but don’t be an asshole, it’s not worth the headache to me.

Before you continue, the following are opinions — I’m not a registered investment advisor. I’m a guy that lost a bunch of money trading options, recovered, and now only focus on TSLA (100% of my holdings). I enjoy sharing what I’ve learnt.

During the peak of the pandemic, the U.S. Fed injected more than $2,000,000,000,000 into the economy. People had extra cash in their pockets, worked less, and spent more. Demand boomed, supply chains couldn’t keep up, prices & the stock market increased — and people had COVID babies ;)

Cue to 2022, we’re out of the pandemic and are facing an oil crises. The Fed has 2 main focuses: (1) Employment & (2) Stable prices. Employment is at an all time high for now — even with the layoffs you’ve heard of. To stabilize volatile prices (sorry if you drive an SUV), you can either (1) Increase supply &/or (2) Destroy demand.

Increasing the supply of crude oil doesn’t happen overnight, and the quickest way the Fed can regain control of inflation is by destroying demand. I expect the stock market (especially high growth companies) to continue to dip and advise against “buy the fucking dip bro.” Don’t fight the U.S. Central Bank, they’ve been around longer than you and always come out on top — I learnt this the hard way.

I feel it in my day-to-day real estate interactions too, empty open-houses and price reductions are becoming more common. People’s purchasing powers have been affected thanks to the Fed’s interest rate hikes. The most difficult thing I did with my own portfolio is liquidating all of my TSLA shares. Don’t get me wrong, I’m still super bullish on TSLA — however, a lack of steady income and expected future dips have caused me to reevaluate my strategy. I’ll share a blog post once I start buying again, but for now I’m sitting on my cash until this passes.


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