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Robert Picard cautions against market timing, while advocating for long-term, strategic investing
Key Takeaways
- Robert Picard says market timing is difficult - and detrimental to the economy because constantly fluctuating capital impedes long-term planning for CEOs. Instead, he sees real value in the stable, long-term capital provided by private investments.
- Long-term strategic planning - not market timing - is critical to successful private markets investments, and outcomes may be best investing across multiple vintages.
- Nevertheless, there can be interesting entry points for private markets asset classes, which currently includes areas such as: private credit, single-family rentals, industrial real estate, and multiple tech sub-sectors.
Transcript
My name is Robert Picard. I head up private market solutions at Hightower Advisors. Hightower is a community of 135 separate advisor businesses and wealth management firms spread across the United States in approximately 34 different states. My view on timing the market is, and I've talked about this often, friends and family know that, you know, we're constantly being hit by the media, whether it be CNBC with the countdown to the opening bell. You know, we just saw recently the question with GameStop where we had people now buying and selling the market. I find it really very difficult to time the market, and I think it's a bad habit. I think it's bad for our economy to be market timing.
I think it's important to give corporate America, some of our best CEOs, and others longer time horizons to generate revenues and be able to plan. And one of the benefits of private markets is this concept that it's long-term capital, it's long-term commitments. And I believe that provides our economy, the US economy, with a real edge to invest long-term, stable capital that they know they can plan for multiple years to come.
Now that's good, having that long-term capital commitment, but at the same time, within our portfolio, we also like to have multiple vintages and different vintage years have potential different outcome scenarios. And right now, in an environment where we've had a certain amount of dislocation due to rising interest rates and when some of the best money managers in the world are telling me they're seeing some of the greatest opportunities of their lifetime, it's a great opportunity to have dry powder or cash or new money to invest in opportunities, whether it be in real estate and elsewhere, to basically take advantage of some of those dislocations, specifically in private credit, for instance; having that ability to create funds that basically replace community banks and traditional banks at lending money or providing loans to corporate America, that's exciting.
And we're looking at vintage 2024. So when I say vintages, meaning funds that are created with dry powder in 2024 and 2025, as most likely some of the better vintages to be offered over the past ten or 20 years. We're also talking about single-family rental opportunities where there's a shortage of 4 to 5 million homes there, too. We think there's a significant opportunity in single-family rentals, industrial real estate. And, of course, there's ongoing tailwinds now in certain areas of technology, for instance, cybersecurity, where we see ongoing opportunity, automation, robotics having to do with manufacturing coming back in the supply chain coming back or reshoring coming back to the United States.
Nonetheless, these are still long-term investments that are really not suitable for market timing per se, and that goes along to the example I've used before with a lot of my wealth management teams, which is just when you buy a house, you're not looking to buy this month and then sell it three or five months later. You're really looking for a long-term investment to really own it and watch it grow or improve with your life and your life journey.
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