Best tertiary markets to invest in 2020

There is a significant amount of private capital looking for deals. More specifically, I believe a tertiary market has steady but controlled job growth, population under one million people and a combination of traditional and alternative economic drivers. Skip to content. We have a real estate market that has not had to manage through a recession in quite some time. There continues to be plenty of private capital available. The market has been receptive to deals associated with a growth story and has rewarded REITs who have kept leverage levels in check. Private portfolio owners can run a dual-track process of sale versus IPO.

1. Stocks keep climbing.

Much of that time has been spent looking at secondary and tertiary markets. Over the last 20 years we have successfully purchased, entitled and developed projects in nearly every asset class in secondary and tertiary markets across New Mexico, Texas, Florida, South Carolina and Arizona. When there is so much focus put on primary and gateway markets, what’s the draw of secondary and tertiary markets? Real estate experts define markets in many ways, which causes infinite confusion for real estate investors. Opinions on market classification vary depending on who is asked and the criteria by which they measure, because there is no concise definition or standard practice across the industry.

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E very bull market has its quirks, but this one, in its old age, has developed a split personality. And yet, this is no charging bull. It’s more like a Ferdinand, the old children’s book character who refuses to fight. What’s so strange is that the march to record highs has been led by investments favored by the timid—big, U. Money flowing out of stock funds has belied the index gains. We think the bull can manage a more modest run in , with a good chance that market leadership will come from sectors more traditionally, well, bullish. The familiar litany of risks hasn’t disappeared.

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E very bull market has its quirks, but this one, in its old age, has developed a split personality. And yet, this is no charging bull. It’s more like a Ferdinand, the old children’s book character who refuses to fight. What’s so strange is that the march to record highs has been led by tdrtiary favored by the timid—big, U.

Money flowing out of stock funds has belied the index bwst. We think the bull can manage a more modest run inwith a good chance that market leadership will come from sectors more traditionally, well, bullish.

The familiar litany of risks hasn’t disappeared. But rather than obsessing about lurking bears and an imminent recession at least for a whileit will make sense to mix a little offense with the defense in your portfolio. For some ideas on what to do with your money now, read about the trends we think will shape the market in Prices and other data are as of October The stock market has defied the odds by continuing to rise well into its 11th year, despite softening earnings growth, recession fears and a huge cloud of tariff-induced uncertainty.

Some of those odds will shift a bit more in the mzrkets favor in as central bank stimulus works through the economy, earnings growth picks up, and investors regain an appetite for risk while at least a partial trade deal with China seems doable. To be clear, we’re not saying to go all-in on stocks at bedt late stage in the economic recovery and the bull market.

And this is no time for complacency, says Terri Spath, chief investment officer at Sierra Funds. That translates to a Dow Jones industrial average of around the 28, mark. Whether our call is wide of the mark, and whether the peak in comes at midyear or year-end, depends largely on how much the U.

We’ll also note that ina U. But the report was an improvement from the previous month, and similar indexes are showing more of an inflection. For more, see our interview with Bell. Yertiary the U. Business spending in the U. But with jn at decades-long lows, consumers, who account for the bulk of the U. So does the Federal Reserve, which has cut short-term rates three times since June.

Markeys expects the unemployment rate to inch 2200 to 3. He is betting on the side that has U. To say was a disappointing year for corporate earnings is an understatement. Wall Street analysts expect tepid profit growth of 1. But context is key: It’s no surprise that earnings were flat compared with profits in that were supercharged by corporate tax cuts.

Still, «that’s sufficient to keep the market moving higher,» he says. Reversing trends, the strongest profit growth is expected from the energy, industrials and materials sectors—the three biggest laggards in Before worrying about the presidential election, investors must first parse the potential fallout from a presidential impeachment—or not. The view on Wall Street is that even if President Trump is impeached, his removal from office is unlikely, and the exercise will turn out to be neutral for stocks.

In terms of election outcomes, the worst for stocks historically has been a Republican president with a split Congress, according to RBC Capital Markets with being a glaring contradiction. No sector is more in the policy crosshairs than health care, with insurers and drug makers buffeted by proposals to curb prescription prices and expand Medicare.

These are variations on familiar themes, and health care stocks often lag matkets of U. As a result, Goldman recommends that investors tilt away from health care stocks. Investors should tread carefully with other sectors most at risk of potential policy changes, including energy climate risk disclosures, carbon emissions regulations, fracking bans and financials more regulation, caps on credit card interest, student debt forgiveness.

It may seem counterintuitive at this late stage, but the market in could reward a little more risk-taking, especially when it comes to betting on cyclical stocks those that are more sensitive to swings in the economy.

We think that’s where we want to be positioned in Consider consumer discretionary stocks those of companies that make nonessential consumer goods. Tech is another tertkary sector forbut with a twist, says Paulsen. Don’t abandon defensive holdings, such as consumer staples, utilities or low-volatility stocks.

But you’ll want to scout for the less-pricey names. For years, value stocks those that are bargains based on corporate measures such as earnings or sales have not kept pace with growth stocks those boosting earnings and sales faster than their peers.

Since September, however, the value index has trounced growth, returning 6. We’ve seen such head fakes. But analysts at Bank of America Merrill Lynch see «a convergence of signs for best tertiary markets to invest in 2020 sustained value run. Moreover, according to BofA, value stocks have been shunned by fund managers, leaving them both inexpensive and with lots of room to run. Yields on year Treasuries sank as low as 1.

Since then, the Fed has pushed short-term rates lower, and year Treasury yields inched back up to 1. High-yield bonds avoid the oil patchemerging-markets bonds and dividend-paying stocks such as real estate investment trusts and utilities are good places to hunt for yield. Spath, at Sierra Funds, is bullish on preferred stocks. For more ideas, see Income Investing. Meanwhile, the European Central Bank launched another round best tertiary markets to invest in 2020 monetary stimulus in October, and the Fed easing rates in the U.

Global trade tensions could de-escalate as the U. But in terms of portfolio strategies, he says, «the bottom line is that Stay Home has outperformed Go Global during most of the current bull market, but Stay Home could lag over the next six to 12 months.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. Markets XLY. Stocks keep climbing. Latest Markets Videos. See more videos. Your Watchlist is. Add a Symbol. Add a symbol to your watchlist.

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2. Recession fears recede.

Cap rate compression is also a sign of growing competition and market viability. And much of the new properties set to hit the market next year will be of the higher-end variety. However, sale processes can surface strong all-cash bids that can innvest completed quickly and eliminate market risk. Share teryiary facebook Share to twitter Share to mariets. Those trading at discounts to NAV will need to focus on internal fundamentals and look toward other ways to add value for shareholders, such as value-added projects in their current portfolio or the sale of assets along with share buybacks. I expect that trend to continue. A static or overly simplified market bset will hold back any successful investor. Opinions on market classification vary depending on who is asked and the criteria by which they measure, because there is no concise definition or standard practice across the industry. Best tertiary markets to invest in 2020 expert offers this definition : «A primary market has 5 million or more people. You would end up with a narrow and confused view of the local economy. Forbes Real Estate Council is an invitation-only community for executives in the real estate industry. Look closely at job growth not just at the macro level, but also on the micro level to confirm your own investment assumptions. Log In. Brad Butcher : The general outlook is positive ijvest as is normal, it is really sector dependent. Analyze individual characteristics present in the market, and compare them to national trends.