The Equity Partner

Rising interest rates = less qualified buyers = tighter credit requirements = lower demand = price reductions in assets. There is a method to the madness but there will bumps in the road. Stay the course and find opportunities in the noise.

Pent up demand has led to overspending. Be cautious of building too much credit card debt. Student loan payments are returning, inflation has continued, and companies are learning to do more with less. Reduce high interest credit card debt, build cash reserves and invest.

Impact.

Happy Sunday 😎

Execute.

IMO: This is one of the main statements on the FDIC’s website. The reason this statement is placed here is to ensure the confidence of the US government’s banking system. This is very important because strength, diversification and stability is important when choosing a bank. In most cases, banks that experiences challenges will be acquisition targets. The FDIC will work to find the appropriate bank to help stabilize the weaknesses and transition consumers to a different platform. A little food for thought on this Monday morning.

Happy Black History Month “Black History Month is an annual celebration of achievements by African Americans and a time for recognizing their central role in U.S. history. Also known as African American History Month, the event grew out of “Negro History Week,” the brainchild of noted historian Carter G. Woodson and other prominent African Americans. Since 1976, every U.S. president has officially designated the month of February as Black History Month. Other countries around the world, including Canada and the United Kingdom, also devote a month to celebrating Black history.” Via History.com

According to Forbes, “Fidelity Investments, the giant financial services company, is committing $250 million to support as many as 50,000 underserved minority college students with scholarships, mentorships and other forms of support over the next five years.” This is a great investment into our next future leaders for students that attend HBCU’s.

Happy MLK Day! ✊🏽

Most economists anticipate a soft recession compared to 2008 or 2020 pandemic. Average recession is 10 months with substantial recoveries post recession. Stay consistent, find opportunities in the noise and “Act like you have been here before”!

Happy New Year! 🎆

Economic Cycles: Expansion, Peak, Recession and Recovery. There is a saying “Act like you have been here before”. Conditions are challenging but normal. Some industries will be more impacted by cycles which results in contraction or job loss. Educate yourself, be patient and recognize the opportunities in midst of the noise.

Less talk, more ex*****on. Today’s investments will pay off 10 years from now.

Investing requires patience and research. The current economic environment will create opportunities. Purchase quality assets you believe in, determine their growth potential and long term exit strategy.

Take control of the career and lifestyle you want.

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Make sure you fully explore and research all options when it comes to setting aside capital to build and grow your business. Grants, Economic Development Incentives, savings, investors, private equity, etc.

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Money management. It’s not about how much you make, it’s about how much you keep.

Diversify.

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This period of time doesn’t feel good but it’s normal. Evaluate your budget, cash reserves and areas of risk. Set aside cash for opportunities or unexpected expenses. Debt heavy companies and individuals carry the highest amount of risk. Revolving lines of credit and credit cards will become a burden if balances are not paid down. This is why preparation and patience are very important.

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IMO: We are in a bear market. Rising rates, rising cost of goods and services, decline in equities, etc. The difference between 2008 and 2022 is that 2008 was a financial crisis which included massive foreclosures, job loss, and tightening of the banks. In contrast, banks are much more capitalized, job growth is positive and companies have stronger balance sheets due to the liquidity circulated in 2020. In summary, we are in much better position to absorb the shock. Be patient and invest in assets that have the ability to surge when we get to the other side.

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The stock market and the economy in general has been overdue for a significant pull back. Be patient, thoughtful and look for high quality opportunities.

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According to In economics, a recession is a business cycle contraction when there is a general decline in economic activity.Recessions generally occur when there is a widespread drop in spending (an adverse demand shock). This may be triggered by various events, such as a financial crisis, an external trade shock, an adverse supply shock, the bursting of an economic bubble, or a large-scale anthropogenic or natural disaster (e.g. a pandemic). In the United States, it is defined as "a significant decline in economic activity spread across the market, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales". With a surge in rates, real estate values, etc. it is always best to prepare for some sort of pull back, correction or economic decline. Liquidity equals flexibility to absorb unexpected rise in cost.

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The cost of capital is rising. According to CNBC, “Now the expectation is that the central bank may raise rates by a half percentage point at each of its May and June meetings.

Each move will correspond with a hike in the prime rate and immediately send financing costs higher for many forms of consumer borrowing.” The rise in financing cost have the potential to reduce the number of qualified borrowers, put a strain on current borrowers ability to repay, and slow down the economic growth. Consider reducing variable debt (credit cards, lines of credit) and building cash for emergencies.

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Borrowing money can allow you to acquire assets and grow your net worth at a faster rate but being mindful that asset values can increase and decline is very important. 0% down, 100% financing , etc. carries the greatest amount of risk.

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