Michael Burry has always been one to defy conventional wisdom.
The famous hedge fund manager successfully bet on the US housing bubble in 2008, a bold call that became the focal point of “The Big Short”.
He is now betting against the US stock market.
In its most recent 13F filing with the Securities and Exchange Commission, Burry’s subsidiary Scion Asset Management disclosed a significant amount of put options against exchange-traded funds (ETFs) that track major US stock market indexes.
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In particular, Scion held $886.56 million worth of put options for The SPDR S&P 500 ETF (NYSEARCA:SPY) at the end of the second quarter. SPY tracks the S&P 500 Index and is the largest US ETF measured by assets under management. Burry also had $738.84 million in put options for Invesco QQQ Trust Series 1 (NASDAQ: QQQ), a Nasdaq-100 ETF.
Put options provide the holder with the right to sell the asset at a predetermined price. The value of put options usually increases when the price of the underlying asset decreases.
With a combined value of $1.6 billion, these put options made up 93.59% of Burry’s portfolio at the end of June.
If you’re as worried about the future of the market as Perry, there are investment opportunities outside of stocks. Here’s a look at three of them.
It is said that 90% of the world’s millionaires built their wealth through real estate. Now it’s your turn. Browse real estate offers in the market for investments of at least $100
High-yield savings accounts
When the Fed kept benchmark interest rates near zero, most savings accounts paid almost nothing.
Then inflation got out of control, and the Fed was forced to start tightening monetary policy. And in 2022, the US central bank announced seven interest rate increases.
Interest rate increases continued into 2023, and the record rate was the highest since 2001.
While high interest rates have sent shock waves through the economy – they are the main reason many experts are warning about stocks – they also mean that people can finally earn some return on their savings.
Single family rentals
This may seem counterintuitive. The high interest rate environment is also driving up mortgage rates, so shouldn’t that negatively affect the housing market?
It is true that real estate has taken a hit.
Billionaire investor Stanley Druckenmiller said recently that the housing market has “clearly fallen significantly due to the 500 basis point increase in interest rates”.
But this is not a bad omen, as he noted that there is now a “structural shortage of single-family homes”.
“So, if things get bad enough, I can actually see that housing — which is the last thing you can think of intuitively — could be a huge beneficiary down the road,” Druckenmiller said.
The truth is that no matter what the state of the stock market is, people will always need a place to live. At the same time, rising house prices and rising mortgage rates mean that owning a home is becoming less feasible. And when people can’t afford to buy a house, rent becomes the only option. This creates a steady stream of rental income for landlords.
The best part? It is easy for retail investors to invest in housing – and You don’t need to buy a house To do that. These days, there are options for Invest directly in single-family rentals with at least $100 While staying completely away.
Art may not be the first thing that comes to people’s mind when they think of investments. But the wealthy have long held artifacts in their portfolios, and reap the rewards from this unique asset class.
From 1995 to 2022, the value of contemporary art increased at a compound annual growth rate of 12.6%, outperforming the S&P 500’s 9% annual return over the same time frame.
Art also offers diversification since its value is not directly related to the stock market, bonds, or real estate.
Granted, it usually takes a lot to get into the game.
For example, in 2020, Amazon.com founder Jeff Bezos reportedly spent $52.5 million on Ed Rocha’s “Hurting the Word Radio #2,” and another $18.5 million on “Vignette 19.” to Kerry James Marshall.
Nowadays, you do not need to be the founder of an e-commerce empire to be able to delve into the art market. New companies have created avenues for retail investors Invest in masterpieces like Banksy and Picasso For less than $20 per share.
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