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Im seeing some interesting trends emerge, said Andrew Lokenauth, money expert and owner ofFluent In Finance.
The thing is, the 1% are making moves that most regular investors havent caught onto yet.
But heres what most people dont know: These deals are typically hidden from regular investors.
Instead, theyre snatching up industrial warehouses and data centers.
He explained that this is way better than the standard 3% to 4% from residential properties.
Alternative Investments Are Becoming Massive
Lokenauths clients are putting serious money into alternative investments.
One of his clients bought a Basquiat piece for $2.1 million.
Seemed crazy at the time, but its worth about $3.5 million now, Lokenauth said.
He noted these assets tend to hold value even when markets crash.
He explained that the really smart money is also investing in water rights.
Climate change is making water increasingly valuable, he said.
According to thePew Research Center, the majority of Americans arent confident in the safety and reliability of crypto.
But thats not stopping the ultra-wealthy.
Theyre not buying bitcoin, though, per Lokenauth.
Instead, theyre focused on infrastructure plays and private blockchain companies.
Much smarter strategy, he said.
Theyre Protecting Their Portfolios Too
The smartest thing Lokenauth is seeing wealthy investors do is geographic diversification.
Theyre spreading assets across different countries and jurisdictions.
And its not just for tax reasons.
Its about protecting against political instability too.
Theyre also protecting their wealth with insurance.
Private placement life insurance is becoming huge.
Its a tax-efficient way to invest in almost anything.
The structures we use can save millions in taxes.
Theyre also staying away from traditional mutual funds.
The fees eat too much return, Lokenauth explained.
My clients are either going totally passive with ultra-low-cost ETFs or super active with direct investments and hedge funds.
Nothing in between, he said.
Commercial office buildings are also completely off the table.
Lokenauth said he had clients who owned prime office space in major cities, but theyve all sold.
Remote work changed everything.
Those buildings are going to be empty for years, he said.
But by watching their moves, you’re free to often find similar opportunities in the public markets.
Thats where the real edge comes from.
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