Scott Trench: How I'm Protecting My Money From “Irrational Exuberance”

BiggerPockets Real Estate Podcast

BiggerPockets

Education, Business, Investing

4.8 • 16.5K Ratings

🗓️ 14 March 2025

⏱️ 40 minutes

🔗️ Recording | iTunes | RSS

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Summary

Stock prices are falling, and Americans are fearful. Tariffs, trade wars, economic tension, and interest rates are putting pressure on asset prices. Commercial real estate has already crashed, but the worst may be yet to come. Home prices aren’t growing; in fact, small multifamily prices may even be declining. What should you do? We can’t provide financial advice, but Scott Trench, CEO of BiggerPockets, is revealing how he’s protecting his wealth in 2025. A recession could be coming; we’re all aware of that. But what does this mean for real estate, stock, crypto, and gold prices? The “irrational exuberance” bubble seems to have popped after stocks hit wildly high price-to-earnings ratios, Bitcoin soared to six figures, and gold began a massive runup. Things are about to change very quickly. Scott is putting his money where his mouth is, revealing the contrarian moves he’s making to his portfolio to keep his wealth growing during this increasingly volatile period. He’s giving his stock market prediction, interest rate prediction, and home price prediction and sharing where real estate investors should look for stellar deals as everyday Americans run away in fear. Find investor-friendly tax and financial experts with BiggerPockets Tax & Financial Services Finder! In This Episode We Cover Scott’s exact portfolio allocation: what he’s selling and what he’s holding NOW The speculative bubble that could be very close to (if not already) popping Will interest rates rise further despite market volatility? The biggest buying opportunities for investors to score killer deals on investment properties The critical risk to index funds that investors MUST be aware of Could commercial real estate prices crash even more, creating substantial potential margins for investors? And So Much More! Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/real-estate-1095 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected]. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	What's going on, everybody? I'm Scott Trench, host of the Bigger Pockets podcast today.
0:09.3	You may also know me as the host of the Bigger Pockets Money podcast over there with my co-host,
0:14.2	Mindy Jensen and CEO of Bigger Pockets.
0:17.0	I'll be filling in for Dave today, who is out on a personal matter, and I couldn't be more excited to share with you today my thesis for what's going on here in 2025.
0:28.4	I'm a pretty big bear in many sectors of the economy, and I hope that today's discussion will give you insight into how I break down the opportunities to invest across most of the
0:39.0	major asset classes that are available to ordinary Americans, what I'm doing in response to
0:44.9	that analysis with my personal portfolio, and the tax considerations that are in play
0:50.9	in the context of me making real moves here in Q1, 2025 with my portfolio
0:57.0	that involve realizing gains in some cases to reallocate funds to different asset classes
1:02.5	and sectors. So spoiler alert again, I'm a big bear. It's written right there on this top of the
1:07.8	screen here. I think we're in a period that I'm calling irrational exuberance 3.0. And irrational exuberance refers to a state where investors
1:15.2	are wildly overvaluing assets relative to their intrinsic or fundamental value. This book was
1:22.0	written by a very famous economist called Robert Schiller, then published, I think, March 1999 right before the
1:29.3	dot-com crash. He posted an update to that book in 2008. And then he posted another one,
1:35.0	I think in 2014. I might have to go back and check that one, in fact, check that, but I,
1:39.2	which obviously did not happen. So, but the guy is two out of three. And I'm thinking about
1:43.9	these irrationally exuberant areas of the economy across real estate. did not happen. But the guy is two out of three and I'm thinking about these
1:44.3	irrationally exuberant areas of the economy across real estate stocks and other asset
1:49.7	classes. And I think as we headed into 2025, we're seeing a lot of similarities to what
1:55.4	Professor Schiller from Yale University called out multiple times throughout his career.
2:00.5	Guys, this is a presentation. I prepared a slide deck. I'm going to be referring to charts
2:04.9	and graphs throughout this discussion. I will try to be mindful of those of you who are listening
	...

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