Newsletter: December 2024
Happy Holidays from all of us at Comfort Capital! This season, we hope you’re enjoying meaningful moments with family and friends. The holidays offer a time to reflect on connection, gratitude, and the joy of celebrating with those who matter most.
In this month’s newsletter, we’ll cover the Federal Reserve’s recent rate cut, share what excites us about 2025, and provide highlights from our investor holiday party (video recap included!). We’ll also remind you to participate in our investor survey—your insights are invaluable as we plan for the year ahead.
Let’s dive in.
Fed Rate Cut: Impact and Market Response
Yesterday, the Federal Reserve announced another rate cut, reducing the Federal Funds Rate by 0.25%. This marks the third cut this year and a total reduction of 1%, bringing the target rate to 4.25%–4.5%. While the cut itself was widely expected, markets reacted sharply to the Fed’s revised 2025 forecast, which now anticipates just two additional cuts next year instead of the previously projected four.
Here’s what unfolded:
- Treasury Yields: Despite the rate cut, yields continued to rise, signaling investor uncertainty about the Fed’s ability to maintain lower rates over the long term.
- Stock Market Reaction: Markets responded with a sell-off as investors reassessed corporate earnings and broader economic conditions in light of the Fed’s more cautious stance.
This reaction underscores the delicate balance the Federal Reserve is managing in its efforts to achieve a soft landing while keeping inflation in check (currently at 2.7%, above their 2.0% target).
Despite market volatility, we remain confident in the stability and performance of manufactured housing communities (MHCs). These investments consistently provide steady cash flow and have proven resilient, regardless of broader economic conditions.
Looking Ahead to 2025
As we approach 2025, the year is shaping up to be one of significant opportunity. The incoming administration’s pro-business agenda is likely to have a meaningful impact on the economic landscape. Here’s what we’re monitoring:
- Bonus Depreciation: There’s growing anticipation of the return of 100% bonus depreciation, which would offer significant tax-saving opportunities for real estate investors, particularly in MHCs.
- Lower Taxes and Deregulation: Proposed tax reforms, deregulation, and a focus on economic growth could create an even more favorable environment for investors, particularly for the small business sectors which is the backbone of the US economy.
These potential developments position 2025 as a year of opportunity for proactive investors.
Why Manufactured Housing Communities?
Manufactured housing communities continue to stand out as a reliable and strategic investment. Here’s why:
- Recession Resilience: MHCs have consistently outperformed other real estate assets during economic downturns, offering dependable cash flow.
- Tax Efficiency: With potential policy shifts ahead, the tax advantages of this asset class are expected to remain compelling.
- Market Demand: The persistent need for affordable housing ensures strong demand, irrespective of broader market fluctuations.
At Comfort Capital, we believe MHCs are uniquely positioned to thrive in an evolving economic landscape, offering both stability and growth potential for our investors.
Holiday Party & Toy Drive Recap
As we reflect on 2024, we’re deeply grateful for your trust and partnership. Together, we’ve not only achieved financial success but also created meaningful impact—and had some fun along the way!
As we look ahead, Comfort Capital has never been in a stronger position. Our team, our investors, and our mission are all aligned to capture the incredible opportunities in the manufactured housing space. These investments are difficult to access but offer exceptional risk-adjusted returns – make sure to tell a friend who can benefit from the opportunity we provide.
We’re passionate about creating wealth and financial freedom for real people and are excited about what the future holds. We hope you are too!
From all of us at Comfort Capital, we wish you a joyful holiday season and a prosperous New Year.
If you have any questions, want to discuss rate cuts, or are curious about Casa Piena, schedule a one-on-one call by clicking below.
Here’s to a successful and impactful 2025!
