At the start of the new decade, none of us could have predicted what we’d currently be facing. Though temporary, the past few weeks have presented a new normal that we’ve all adjusted to in our own way. We all know this is going to pass, but the stock market gyrations, economic impact, and the presidential election can create anxiety, and rightfully so. But none of us are alone. You’ve all already received many messages from employers, family, and businesses regarding how to handle the coronavirus outbreak. So our focus today is to talk about what we envision will happen next, where we need to be cautious and patient, and what opportunities we believe will emerge. Yieldstreet is here to support you during one of the most trying times that many of us have ever experienced.
2010-2020: The Golden Age of Tech
The past decade was the Golden Age of Tech. The top 7 out of the top 10 companies by market cap at the end of 2019 were tech companies including Google, Apple, Microsoft, Facebook, and Amazon. Mobile and smartphones significantly progressed, changing the way we live our lives. How we hail a cab, shop, consume content, interact with friends and family, and even book travel, have been drastically altered. Apps changed our life in many aspects and eased the burden of daily tasks. Yet, financial services are still catching up. Our ACH and wire transfers have become electronic but are still governed by NACHA (National Automated Clearing House Association) rules from the 1960s, and check clearing still takes 3-5 business days. While gaining access to financial products is still complicated, opaque, and has layers upon layers of fees. The way we work, play, and retire has changed. However, we still don’t have comparably modern tools to generate income for fueling our unique and individual lifestyles. Investment products are designed by Wall Street for Wall Street. Not for you.
2020-2030: The Golden Age of Fintech
Regardless of the challenges we currently face, we believe that we are entering the Golden Age of Fintech. Information, education, and access are changing how we interact with our financial institutions. How we learn, plan, invest, and earn money from investments is changing. Yieldstreet is founded on the belief that the traditional investor journey needed to change. Everyone deserves access to income-generating investments, and that is no different during difficult times like these. As always, Yieldstreet will continue to bring you products across the yield and risk spectrum that fall into three targeted yield groups:
While our focus has primarily been on Higher Yield+ (providing you with yields of 8-12%), with the launch of the Yieldstreet Prism Fund, Yieldstreet Wallet, Yieldstreet IRA, and our Short Term Note Series, we are expanding our offering set – recognizing that we cannot guarantee any investment return, we can add more options.
Yieldstreet Focus in 2020
The Yieldstreet team is focused on two major areas for our investors:
1. Existing Portfolio:
Our portfolio and servicing teams, including our portfolio managers, are monitoring our portfolio across asset classes, staying in touch with our originators and borrowers on the evolving situation due to the coronavirus. We shared our initial thoughts on the coronavirus outbreak here and will continue to update you as the situation unfolds.
2. New Opportunities:
For a while now, many have predicted a market correction. Though we admit, we didn’t know it would come so unexpectedly and because of a global pandemic. We firmly believe, however, that this downturn will bring opportunity to the Yieldstreet investor community. It’s not going to happen overnight, but we see it on the horizon.
Take a look at the graphic below that illustrates what could happen to retail investing during times of crisis:
Does this behavior look familiar? Points 2-4 present an opportunity that retail is generally too nervous to take. This is where Wall Street pros have made big bets and won.
Though the current state of the market has created an anxious environment, Yieldstreet was founded and built specifically for uncertain times like these—allowing you access to non-stock market investments that are priced attractively with risk-adjusted returns. Many retail investors have demonstrated such behavior, selling low and waiting too long to jump back into the market, while the legends on the street generate great wealth like John Paulson, Steve Mnuchin, and Howard Marks during the 2008 crisis. The truly great investors like Warren Buffet and John Bogle understand that at times of market volatility, there can be incredible opportunities for further wealth creation.
The Next 90 Days: Be cautious, learn, and be patient
A downturn in the economy and its inevitable rebound is when the majority of wealth is created. We’re here to guide you through this process and help ensure that our investors not only endure the storm but come out stronger on the other side.
Yieldstreet is pushing forward and evaluating opportunities that have emerged as a result of this new market. Our team feels that relative risk/reward in the private markets has not yet caught up with the new reality and public comps. Hence, we prefer to slow down, form hypotheses, and wait for opportunities which explains why we haven’t brought new opportunities to you in the last few weeks. For now, we are asking investors for the same, be patient. Investment opportunities are expected to get better in the coming weeks and months, so keep your capital ready. With Yieldstreet’s access, we believe you will see potentially strong risk-adjusted opportunities emerge and we want you to be able to educate yourself and take advantage of the market dislocation.
We’re in this together:
We recognize that we’re all nervous. We want to ensure that our families and communities are safe and that our jobs and livelihoods are secure. We’re all looking to have confidence in the market and that governments around the world will step in to protect our financial well-being. It’s natural to feel on edge, but during this time, Yieldstreet is here for you. We have a seasoned team with years of experience in investing, many through cycles such as this.
Yieldstreet will continue to present you with new opportunities along with information to consider as you make informed decisions. We will always be investor-first and are working tirelessly every day to help you realize your next level.
For additional insight into the market, please read our Q&A with Yieldstreet Advisor, Dan Posner on How to Adapt Your Investment Mindset for Times of Uncertainty.
Stay healthy and strong!
1 Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. All securities involve risk and may result in significant losses.
2 Represents a net estimated, unrealized annualized internal rate of return (IRR) of your portfolio and is based by reference to the effective distribution dates and amounts to and from the investments, as well as any outstanding principal and accrued and unpaid interest as of the current date, after deduction of management fees and all other expenses charged to the investments.[read more]
3 "Annual interest" represents an annual target rate of interest and "term" represents the estimated term of the investment. Such target returns and estimated term are projections of the returns or term and may ultimately not be achieved. Actual returns and term may be materially different from such projections. These targeted returns and estimated term are based on the underlying agreement between the SPV and borrower or originator, as applicable.
4 Reflects the initial quarterly distribution declared by the board of directors on February 6, 2020, which will be payable to stockholders of record as of June 10, 2020, and the initial offering price of $10 per share.
5 The Fund will cease investing and seek to liquidate the Fund's remaining portfolio no later than 48 months after the Fund's initial closing. It may take up to twelve months thereafter to fully monetize any remaining illiquid investments in the Fund's portfolio.
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