From real estate developer to Wall Street writer, the author shares a captivating tale of navigating the highs and lows of the investment landscape. With a unique perspective shaped by personal experiences, this article delves into the importance of risk management and the pursuit of sustainable financial success.
Unlocking the Secrets of Resilient Investing
Embracing the "School of Hard Knocks"
The author's journey began in the real estate industry, where they learned valuable lessons about risk and the importance of foresight. Starting as a young professional eager to make their mark, the author's early experiences in the industry taught them the true meaning of hard work and the challenges that come with building a successful business. From working long hours to navigating the complexities of the real estate market, the author's formative years laid the foundation for their future as a savvy investor.As the author's career progressed, they encountered a series of financial crises that tested their resilience. The 2008 financial collapse, which mirrored the Great Depression, served as a wake-up call, highlighting the need to approach investing with a more comprehensive understanding of risk. The author's personal experiences during this tumultuous period shaped their perspective on the importance of risk management and the ability to adapt to changing market conditions.
Recognizing the Invisible Risks
The author's journey is a testament to the wisdom of renowned investor Howard Marks, who emphasizes that "investment risk is largely invisible before the fact." The author's early days in the real estate industry were marked by a lack of consideration for the potential risks that could arise, a common pitfall for many investors. As the author's net worth grew, they found themselves heavily invested in a single business partnership, with substantial leverage and limited control over the financials.The author's experience serves as a cautionary tale, highlighting the importance of recognizing and managing risk. As Marks aptly states, "recognizing risk is an absolute prerequisite for controlling it." The author's failure to foresee and mitigate the risks inherent in their investments ultimately led to a financial collapse, a lesson that has since shaped their approach to investing.
Rebuilding with a Renewed Perspective
Despite the devastating impact of the financial crisis, the author refused to be deterred. They recognized that taking on calculated risks was necessary to regain their financial independence, embracing the mantra that "scared money never wins." This resilient mindset led the author to explore new investment opportunities, with a focus on diversification and a deeper understanding of risk management.The author's journey has culminated in the identification of three REITs (Real Estate Investment Trusts) that exemplify the principles of resilient investing. These REITs, Agree Realty (ADC), Alexandria Real Estate (ARE), and VICI Properties (VICI), are highlighted for their strong fundamentals, prudent risk management, and the potential to deliver superior returns to investors.By sharing their personal experiences and the lessons learned, the author aims to empower readers to approach investing with a more comprehensive understanding of risk. The author's story serves as a testament to the power of resilience and the importance of adapting to the ever-changing investment landscape.
