ROI Is Not Determined By Timing the Market...

The Weekly Recap

Good morning and happy Friday! Its been a rollercoaster ride for markets on the future of tariffs this week, Treasury Sec. Bessent still says the US is in good shape even with the uncertainty. March CPI reports shows an unexpectedly large slowdown of inflation. The average time a New Yorker spends in their rental apartment is up to 38 months in Manhattan and 51 months in Queens while new monthly data shows rents are getting more expensive. NYC is still the worlds wealthiest city and New Yorkers apparently like to eat in tiny dining rooms in tiny restaurants.

If you missed last weeks newsletter Stocks May Be Riding the Elevator Down, But NYC Real Estate Is On the Way Up, you can read that through the link.

ROI Is Determined Not by Timing the Market…

But by time spent IN the market. While we have all experienced whiplash between the ‘world is ending’ and ‘we are so back’ sentiments this past week due to market fluctuations around the future of tariffs, its important to understand how short term market moves impact long term gains. The short answer is, it doesn’t.

When it comes to real estate purchases, its never a bad time to own, but your return on your investment will be determined by how long you hold onto the asset. If you bought a home in NYC on September 10th, 2001, you are better off today than you were then if you held it. If you bought a home in 2008, right before the housing crises, you are better off today than you were then if you still held it. If you bought in March of 2020, right before Covid, you will be in a better position the longer you hold your home than you are today.

In any asset class, it is hard to make money on short term asset swaps, which is why most people live in their homes on average 5-7 years in NYC. Although life events happen that may force individuals to sell before that ideal timeframe, ROI should also measured differently with home sales than say stock sales. The main reason being is that you’ve had the ability to live in your asset. You cannot live in or create memories or find deeper utility with your Tesla or NVIDIA stock.

As we look at stock market volatility, we also need to understand what the stock market is. It is a snapshot in time. It is an anticipatory vehicle for the potential of future expectations. It is NOT the economy. If we remember to 2024, investors had priced in six interest rate cuts for the year which drove stocks higher even though the chances of that many cuts were less than 1%. Stock market inflections reflect investor sentiment, not the day-to-day health of a economy.

Markets can recover quickly, even when GDP growth is low or negative. In the 2008 financial crises, the S&P experienced a significant decline of -38.5% while GDP only contracted -0.1%. The very next year, the S&P rebounded with a 23.5% gain even though GDP growth was negative at -2.5%. For an even more recent example, during the COVID Pandemic in 2020, the S&P 500 had a positive return of 16.26% while AGDP shrank by almost -3%.

Market Performance

Here are how some other indexes and asset classes have performed as of this morning’s opening bell.

NYC Market Update

Here is a view of new inventory that has come onto the NYC market over the past week as well as newly signed contracts in Manhattan.

Mortgage Rate Update

For the twelfth straight week, the average 30-year fixed-rate mortgage continues to trend down while remaining under 7%. The volatility in the bond markets this week will have some variations in weekly reporting and will be interesting to see how the short term evolution of that market impacts rates. Purchase applications continue to climb and the spring homebuying season is poised to be more favorable than last year.

News You Can Use

• Any Bear Market Could Be Short-Lived, Says Goldman Sachs Wall Street Journal

• Treasury’s Bessent Says Economy ‘In Pretty Good Shape’ Despite Market Rout Axios

• March CPI Report Shows Unexpectedly Large Slowdown in Inflation Wall Street Journal

• Manhattan Rents Just Wont Budge NY Post

• Global Money Market Inflows Surge As Trade Tariffs Stroke Slowdown Fears Reuters

• Here’s How Long New Yorkers Stay in Their Rental Apartments NY Post

• US Payrolls Rose by 228,000 in March CNBC

• NYC Is Still the World’s Wealthiest City NY Post

• Bond Market Turbulence Lifts 30-Year Yield Bloomberg

• Warren Buffet Defended His Massive $300 Billion Cash Pile in February. Now He Doesn’t Have To Yahoo Finance

• Why 10-Year Yields Are on the Treasury Secretary’s Mind Bloomberg

• Trump Extends TikTok Deadline for the Second Time CNBC

• New Yorkers Are Lining Up to Eat in The City’s Smallest Dining Rooms Bloomberg

The Deep Insight

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