The calm amidst the storm

June 27, 20223 min read
The calm amidst the storm
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Key takeaways

  • A market downturn has accelerated in the past six weeks, amidst increased macro risks. 
  • Regardless of whether the current market dislocation continues for the foreseeable future, the US remains well placed to attract global investment flows compared to other economic powerhouses.
  • Yieldstreet is committed to offer investors access to potentially higher risk-adjusted returns, no matter the weather.

In the past six weeks, the broader market environment has deteriorated amidst persistent inflation, the Federal Reserve’s decision to frontload rate hikes and sustained geopolitical risk. We understand the current backdrop may be impacting your investment portfolio, and would like to share some thoughts on financial markets, as well as on the steps we are taking to manage your investments. 

The root causes of the current market downturn, which is potentially the early signal of an upcoming economic slowdown and perhaps even a recession, can be traced back to the supply-demand imbalances that were laid bare at the beginning of the year, with the Russia-Ukraine conflict acting as a further catalyst – exacerbating supply-chain disruptions, causing an energy shock and a driving a deterioration in investor sentiment. 

Yet it also cannot be ignored that a large part of the market’s selloff was concentrated in “growthy” tech stocks, a signal of their potential overvaluation, and also – in our view – of the lack of diversification of some existing passive public markets exposure.

All that said, regardless of whether the current market dislocation continues for the foreseeable future, the US is currently well placed to attract global investment flows, given its relative insulation from global economic trends. While other global powerhouses are also suffering, with Europe grappling with energy-driven inflation and China’s zero COVID strategy causing a decisive increase in unemployment, US exceptionalism remains alive and well.

During times like these it is crucial for investors to be informed about their portfolios. That is why we have been ramping up investor outreach, to better understand your concerns and find a way to address them, and why we have been increasing the pace of investment updates, to give you more insights on your allocations. 

The good news is that Yieldstreet’s investments are broadly performing well and continue to provide potential for diversification from public markets, as well as potential protection from market risk. In addition, it is worth reminding that compelling investment opportunities tend to emerge in times of market stress. 

Our investment teams have been through multiple cycles, and are committed to selecting investment opportunities they believe can help give investors peace of mind in turbulent times, and higher return potential when public markets stabilize. 

For cautious investors, and for the ones worried about high inflation, Yieldstreet offers short-term notes with a limited lock-up period, an attractive coupon and potential downside protection. For investors with a higher risk-return profile, there are private credit deals and funds, and a brand new venture capital offering

Ultimately, Yieldstreet’s large choice of private market opportunities with different risk-return profiles makes it an attractive platform, irrespective of transient market conditions.