To continue the real estate scenario, a micro investor is more likely to jump into the market at any point in the asset cycle. They gravitate to technical analysis and charting. Micro investors, on the other hand, are more interested in the minutia.
This can play out over a couple of years. This is the time these macro investors will be selling off certain properties to prepare. Now, we’re again at what I believe to be the top of the asset cycle. Macro investors can clearly see how the market will play out, and they tend to influence other investors, which directly influences the marketplace. Then, they hold on to those assets while they produce cash flow, maybe buy a bit more, and other investors will follow suit. This knowledge allows a macro investor to come in at the bottom of the market and buy as much real estate as they can.
For the United States, it took until 2011-2012 to get the true bottom of the cycle. Then, it’s going to have to run its course at the bottom of the cycle. That’s the time to get out of the market, before it crashes. 2006 was the top of the asset cycle, and at that stage, the market is overvalued. They’ll use the 2007-2009 housing market as an example. A macro investor is going to examine the whole cycle of a market.
#MACRO VS MICRO TRENDS HOW TO#
They’re looking to history to get clues for how to move forward. In real estate, a macro investor is going to explore the big picture of the markets they invest in. We’ll look at the differences between the two, how investors approach it, and explore the timeframes of each. Today, I want to shed some light on Macro and Micro investing. To do so, I’ve interviewed hundreds of the world’s wealthiest people-investors and financial experts-to get an insider look.
That means creating, protecting, and multiplying your wealth. My mission is to help people thrive in any economy.
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