Real Estate Investment Goal Setting for 2019
John Larson and the Real Estate Cowboys talk passive income real estate investing.
Hear new episodes every Sunday morning at 8 a.m. The Cowboys review the S.M.A.R.T. system for goal setting in 2019 and talk about an opportunity you might not expect.
Keep the #CowboyCoffee hot while listening to John, and the Cowboys talk about how to #BeACowboy and earn passive income in real estate.
Announcer: Have you thought about becoming financially free through real estate investing, but don’t have the time or knowledge to get started? Welcome to the Real Estate Cowboys podcast. Each week we discuss passive income investment opportunities in the red hot Texas market. John Larson and the Real Estate Cowboys will show you how to leverage their team to build wealth in real estate through passive investment opportunities. And now here’s John.
John Larson: Hello, hello, my Real Estate Cowboys, and welcome to another edition of the Real Estate Cowboys podcast. This is your host, John Larson. We are now in 2019 and for those of you who like setting goals, this is a new year to set new goals. If your investment did not work out the way you were hoping back in 2018, well, we have a fresh new year to start. I love starting off with a new clean slate and for serious investors out there, you know, with the new year it means some New Year’s resolutions and also some new goal setting. What went wrong the year before? What can you fix this year? Were you able to meet your goals in 2018? Were you not able to meet your goals in 2018? Where did you fall short? Uh, I know a lot of my investors fell short on cash flow opportunities in 2018 with the real estate prices still going up and up and up, and then now interest rates going up and up and up. For my investors who were interested in investing in rental properties for cash flow, they may not have met their goals in 2018. For my real estate flippers, my single family home flippers out there, you may not have hit your goals for 2018. 2018 was still a year with very low inventory on the market. So good deals were very hard to find. Few and far between. Hoping 2019 brings more opportunities with the rising interest rates. It should cool the amount of buyers that are out on the market. And hopefully bring us more opportunities. In the year of 2019 we are starting to hear some rumblings about layoffs within the automotive industry. So if you’re looking to invest in the Midwest and the Michigan market, Ohio, Indiana, a lot of the Midwest markets that are really built on manufacturing, there may be some foreclosures headed our way here in 2019 and foreclosures along with the fact that the interest rates are going up, which is cooling the buying pattern that we’ve been seeing, uh, over the past eight years. It should open up more opportunities for my house flippers and for my single family rental portfolio investors. I myself have obviously been gearing more towards the commercial market here in the Dallas Fort Worth area. I still think that Dallas Fort Worth, just because of the logistics factor, the fact that the real estate market here is so affordable still and the fact that we’re home to the most corporate headquarters in America. I love the Texas market. I love the Dallas Fort Worth market, especially for commercial real estate, office space, medical office space, you know, retail space. The more and more people that keep moving here, there’s still 400 people a day moving the DFW market. There’s still 1200 people a day moving to Texas. So there’s going to continue to be demand for office retail, you know, medical space that is going to be in demand moving forward. I’m a firm believer in that, you know, so what we tried to do in 2018, a goal of mine was to provide my investors with an opportunity to really earn cash flow because we weren’t able to offer that like we used to in the past with our single family rentals. And so that is where we started our private money lending program, our debt syndication program, which I’ve been talking so much on my podcast and talking about on the Real Estate Guys and Get Rich Education. And if you’re a subscriber to us already, you’ve seen some videos about some of the opportunities that we’ve had lately and the current raise that we have out in North Dallas, which is a 32,000 square foot office space that’s already 90% occupied and cashflowing., We’re planning on buying that building, giving it a facelift. It hasn’t been renovated since 2005. So there’s an opportunity to add some value to the property, bring rents up and get the remaining two spaces that are vacant right now occupied, add maybe a little cafe in there. And you know, like I said, bring rents up and flip it back on the market and possibly sell it or refinance and hold it.
So that is a great opportunity that we have right now that’s paying our investors 10 and a half percent annual fixed on their money. So if you are looking for a cash flow opportunity, a way to achieve double digit fixed returns, I recommend looking into our private money lending debt syndications that we have here at American Real Estate Investments. And you can contact us at AREIUSA.com or RealEstateCowboysDFW.com to learn more about these opportunities. Get that ppm in your hand if you are an accredited investor. Uh, these are only good for accredited investors, so must be accredited to qualify for these deals and participate in these deals. But very, very good opportunities that we have to pay our investors double digit returns here in the year of 2019 and so if you missed your goals in terms of cash flow in 2018, trust me, many of us did. I’m sure many of us that flip homes, were not able to sell the home where they thought they were going to be able to sell it. You know, in the year of 2018 because we did see a downward trend in many markets across America because of the rising interest rates that’s just going to have a negative effect on the buyers out there. There’s going to be less and less mortgage applications coming in because of the fact that the interest rates are going high and, and, and I don’t think that they’re high, but they’re high compared to what buyers have been used to over the past eight years. High interest rates on just the actual consumer side, the retail side, homeowner’s side, which means that the investor loans that you’re going to get through Fannie Mae are also you know at about 6% or greater with 20% down, that is really going to have a negative effect on your cash flow.
Especially if you’re trying to buy properties that are going to be less problematic for you. C class, low B class, D class properties are just going to consistently provide you with problems and it’s anything but passive. And we talk about that so much on the show and that is what I want you to avoid as an investor. If you want passive income and you want a consistent income stream, I don’t think rentals are your best, best option right now. You know, my investors who just like to purchase high B to A class inventory, the year of 2018 was consistently showing them that, hey, it’s, it’s just going to be too tough to get properties that cash flow at a rate that makes me feel comfortable. Um, with the rising rates and the rising prices, especially trying to buy properties in markets where you see a large amount of growth, population growth, you know.
North Carolina has been growing rapidly. Atlanta, Dallas, Houston, Austin, San Antonio, um, even Oklahoma City, many cities across America that are growing exponentially. It’s just so hard to find good, safe deals. Obviously with rentals, you want to buy a property in a market where you know that there’s going to be a consistent amount of people moving in for job opportunities, job growth. And I just saw in 2018 that there were too many of these major metros across America where the value just got too high and the rates going up did not help with anything. And so now if you’re trying to buy good, safe properties in good markets, you’re really just investing on an equity position. You know, they’re just not cash flowing, and the little bit of cash flow that you’re going to make on the property each month. You know, I would just stick that in an account for a rainy day because you know there’s going to be maintenance and vacancy with your property and you know you’re going to have to dip into that kitty to pay off that maintenance that needs to be done to the property throughout the year. And if there is any sort of, you know, vacancy a month or two where you’re going through a turnover and you need to market the property for a new tenant, you know, it takes time. So that’s a little bit of time where your, your property is just not generating income. And then there’s now leasing fees that you have to pay to the property manager. It just really, really eats into the cash flow. Whereas with our private money lending model, especially through IRAs and 401ks, you self-direct those accounts you’re able to invest and loan money on really good, safe commercial real estate deals in a really good safe market like Dallas that’s growing exponentially and it’s home to the most corporate headquarters in America. So you have a lot of jobs here which is going to continue to bring in population, new people.
You know, it’s just so business friendly here due to the no state income tax and affordable real estate and affordable cost of living, that more and more businesses want to continue to move into the Dallas market, and I can’t blame them. And so that’s where we really kind of just pivoted our model in 2018 and that was one of my goals and I achieved that goal. And so now going into 2019 we’re a full boar, offering private money lending opportunities to our investors. I’m actively searching for new deals daily because when these opportunities pay you back, when we go to sell one of these opportunities or refinance one of these opportunities and take those proceeds to pay our investors back, our lenders, we want to have other opportunities for you to roll your initial principle investment into another deal and keep your money working for you at, you know, returns of 10 and a half percent.
And if you’re loaning through an IRA or 401k, that money’s going back to you, those monthly dividends are going back to you tax-free or tax-deferred. So that’s why it’s such a popular option. So if you have not self-directed yet, you need to look at at least diversifying some of your retirement portfolios into a self- directed account and look into private lending with real estate. I’m telling you, it is such a great opportunity. My uncle, who is a very wealthy guy, you know, he told me that he had just, he lost a substantial amount of money in the stock market over the past two weeks. It’s because you saw that huge, huge decline in the stock market. And he had just too much money tied up in stocks, in traditional investments. And when you do that and you don’t diversify enough, you’re going to run into problems like that and you, if you’re listening to the show, and I’m sure many of you have been burned in the past by the stock market. And I just feel like moving forward, especially here in 2019 I don’t know, I think the stock market’s going to get even more volatile.
So put your money into real estate; something that’s backed by an actual hard asset, something that you can have a little bit more control over, something that you know is never going to go down to zero, something that’s always going to hold value, right? And we know with real estate there’s ebb and flows. It goes up and down and, and right now I think we’re going into a downward trend with at least single-family properties because of the fact that the interest rates have risen so much within the past 12 months. If your goal is cash flow or rental property just really doesn’t make as much sense, unless you want to dip into a far riskier investment, which would be a C to D class property in a market that’s not growing by leaps and bounds like the Dallas market. And at that point, you’re going to have to deal with more vacancies, more maintenance, crime theft, vandalism, so on and so forth.
And that I really just deter my investors from even looking at. I just feel like those opportunities come with far too much risk. The properties don’t increase in value. If anything, they lose value. They appreciate much faster than high B to A class properties. And so I just really tend to avoid those and I, you know, advise my clients on avoiding those as well. And so if you want to put your money to work in 2019 to earn double-digit returns in the form of cash flow, I definitely recommend looking at some private lending opportunities, if not with us in the Dallas market, there’s other opportunities across the country. But just be sure that the money that you’re investing in is in a market that has job growth, has population growth so you don’t see the bottom fall out and you know, then you have to deal with a foreclosure.
And with private lending, you still have that security of first lien position just like any bank would. So even though you have to go through a foreclosure, which could be kind of messy, especially when there’s multiple lenders, uh, on a deed, um, it can be done. It’s been done before and at least you can recoup some if not all of your funds back. You know, that gives you that protection that a lot of investors are looking for with private lending as a first lien position and the fixed income that you know you’re going to get each month in the form of an interest payment from the sponsor that you’re working with. So if you haven’t looked into private lending yet, I definitely recommend you do because cash flow is important. And if that is one of your main goals coming into the year of 2019 and beyond, if you were looking for cash flow supplementing income, replacing income, I recommend private lending opportunities, debt syndications because it’s a great way to earn a double-digit fixed return on your money.
So that’s what I’m doing a lot for 2019 and you know, with every new year, you know, there’s going to be an opportunity to review and restrategize and perhaps relaunch new goals and look back on your old goals. And you know, in order to achieve your real estate goals, you need to keep the ball constantly in front of you. The real estate investment landscape, like I said, it’s constantly changing, although it does not change as suddenly as dramatic as stocks like we’ve just seen recently. It does change and I think with each new year you need to have, you know, set new goals. And right now going into 2019 I’m still going to buy single-family properties, uh, especially in some of the more affordable markets that I invest in, like Kansas City, St Louis, Dallas, the values have ran a little bit high. And I think my investors who are listening to the show that have invested with us before in the Dallas market have probably already seen that yes, values have ran high.
Now if you’ve gotten in early on investing in Dallas, like back in 2011, 12, 13, 14, you should be sitting on a considerable amount of equity, which is good for you. But for new investors, it’s going to make it tough, especially now with the rates where they’re at. Our investors that invested back in 2011, 12, 1314 and the Dallas market and locked in that much lower rate and got a property at a more affordable value. Kudos to you. But for my investors out there right now who have income that are looking to put into the real estate market, uh, I can’t say that Dallas is going to be the best option for you right now in terms of if you’re looking for cash flow, uh, if you’re looking for a safe, stable investment that you just want to take advantage of the tax benefits that are available to you, which many of my investors are looking at, then Texas could still make sense.
If you’re looking to purchase with cash, uh, you can still get cash on cash returns in the Dallas market north of 5%. But when you want to factor in the Fannie Mae Finance, you know, 20% down, your rates now at 6% plus. So it doesn’t make as much sense from a cash flow perspective. But once again, it all goes back to your goals. You know, we’ve talked about it before. You know, real estate investing is relatively stable. It generally moves upwards in value over a long period of time. Nevertheless, you know, it is imperative for you to plan and approach it systematically if you’re an investor. And to seek, uh, to make a profit in a big way from it, which there are a lot of options out there to make big profits. For example, my investors who have loaned $100,000 on our private lending opportunities lately are making 875 a month fixed, $875 to the penny fixed, no maintenance, no vacancy to deal with, nothing like that.
Uh, now there’s not super huge tax benefits with private lending unless you’re loaning out of a self-directed IRA or 401k because then, like I said, those dividends, those interest payments are going back to you tax-free or tax-deferred. But I just see so many of my investors lately, they’re looking for cash flow. They feel like, you know, equity is more skeptical than it’s been lately. And I believe that too, with the rising interest rates and cooling the buying pattern. You know, you can’t really count on equity growth year over year. If anything, I feel like prices and stable markets like Dallas might start to hold a little bit and plateau. Whereas other markets across the country, like the Midwest, a lot of midwest markets, you’re going to start to see properties declining in value. It’s really because one, the rising rates is cooling the buying pattern.
But then also, you know there is rumblings, there are rumblings that we’re hearing about potential layoffs in the automotive industry, which is not good for the Midwest. So if you did not achieve your goal in the past year, don’t beat yourself down. There are definitely lessons to be learned from every failure. I learn lessons all the time. But if you did achieve your goals in 2018 you can set your sight on achieving bigger ones this year, which is great. It goes back to using the SMART system. So when identifying goals for 2019 you need to, you know, use a system and there’s a system that I like to use, it’s is called the SMART system. And when we come back from this commercial break, I’m going to get into the SMART system again. We’ve talked about this before, but I want to reestablish the SMART system because we’re coming into a new year and I want my investors to set good goals going into 2019 so you can succeed. So when we come back, we’ll talk more about the SMART system and some other investment opportunities that I, myself am actively looking into that I think are going to pay huge dividends here in 2019 and beyond. So stay tuned. We’ll be right back after this commercial break.
And welcome back from the commercial break. This is your host, John Larson. On this week’s episode, we are talking about real estate goal setting for 2019. Since this is the first podcast that we’ve aired for 2019 I figured it’d be a great time to start talking about reestablishing goals and creating new goals. And looking back on your goals that you set for 2018 did you hit your goals, did you miss them a little bit? Um, did you just bail on some of the goal setting that you put forth in 2018? If you failed, great. No problem. Uh, dust yourself off. We have a new year here and you know, with the real estate market changing year over year, you know, there’s going to be different goals to set as you approach a new year with, you know, a new landscape. And so we’ve been talking a lot about it’s hard to find cash flow with rentals, single-family homes. You know, for those investors out there who don’t have enough money just yet to get into multifamily or just don’t feel comfortable getting into multifamily yet because there’s a lot more moving parts with multifamily as we discussed on a previous episode. But you just want to create a cash flow stream. You know, I’ve been talking more and more and more about the private lending opportunities and the debt syndications that we offer, and other companies offer as well. Uh, and I just think it’s a really, really good option, especially if you have an IRA or 401k that you’re looking to diversify out of the stock market and the traditional investments that are out there.
Because like I said, I’ve had family members just recently, uh, who have lost quite a bit of money in the stock market because of the huge downturn that we saw just recently. And just the fact that it’s becoming more and more volatile and I expect that to continue into 2019. And the rising interest rates are not going to help us on the single-family home side because that’s just going to cause less and less borrowers and buyers for single-family homes, which is going to have a negative impact on equity growth with single-family homes. I wanted to go back and touch on the SMART system that we talked before.
So when you’re setting goals for a new year, you know, we use the system called the SMART system and it’s basically an acronym and the first letter is S, which means you want to set specific goals. You want to be very specific when you’re setting any type of goal, you also want to make sure that your goals are measurable. You want to make sure that your goals are agreed upon and attainable, achievable, and you want to make sure that they are realistic. You don’t want to set unrealistic goals. We want to set goals that we know that we can achieve and attain. And lastly time; time-bound timely, tangible, trackable. Uh, that’s what the T stands for. So, you know, I like to set short and long-term goals. Many times I’ll set goals for myself that are based on quarters throughout the year. And then I like to just set a yearly goal. And then obviously I like to set five-year goals, which are more long-term. But every year I reestablish new goals. What do I want to do with my business this year? What do I want to do with my investments this year? Where I stand, I feel like the stock market’s volatile. I feel like the real estate market’s a little volatile right now with the rising rates and from everything I’m hearing by all reports I’m hearing, the rates are going to continue to go up in 2019, which is not good for retail home buyers and it’s definitely not good for investors because the rate that a retail home buyer is going to get is going to still be less than what an investor is going to get even through Fannie Mae. So it’s just about kind of reestablishing what you’re looking for in 2019. There’s always a good time to invest in real estate. Even in down times. That’s when you start to see more and more opportunities, but you want to be cash heavy when those opportunities arise. If you’re not, then you’re going to miss out on those opportunities because financing is a little bit more expensive and a little bit harder to get and obviously the only way that you can really get good deals sometimes is on a cash offer.
Cash is still king. I am looking at opportunities where I can grow my cash flow, where I can grow my bank account or grow my retirement account, and private lending I think is a great, great option for that.
Another thing I’m going to just kind of throw out there. Um, and I’m giving you basically an insight into my own strategy into 2019. I’m giving you this advice for free. If you haven’t been looking at cannabis oil, CBS oil comes from hemp. It doesn’t come from marijuana. There are many things out there that are many…there’s a lot of research going out there that’s showing that this cannabis oil is helping people for pain, anxiety, and depression, cancer-related symptoms, acne. It has neuroprotective properties, heart health, can benefit heart health, diabetes prevention, antitumor effects, substance abuse treatment, antipsychotic effects. There’s research out there that’s supporting this cannabis oil is helping with these ailments and these illnesses. And so that tells me that eventually the pharmaceutical companies, the government, the FDA is going to come in and start to regulate this sale of cannabis oil. But for right now it has not been done. And so I think there’s a huge opportunity if you are a landowner. I spoke to one of my investors last week who owns 58 acres of land in Oregon. Congress just passed this Farm Bill – it’s an $867 billion Farm Bill that was spurred in part by the pressure from farmers battered by President Trump’s trade war with China and the approved bill allocates billions of dollars in subsidies to American farmers. It legalizes hemp, which CBD is extracted from, not marijuana – hemp. There’s little to note THC in CBD oil. It provides the same health benefits, right? That even marijuana can, but it’s strictly for medicinal use. It does not get you high or anything like that, but this is something you should be looking into if you own land now in an area where hemp can be grown, there is an opportunity for you. And I see an opportunity where I see the opportunity is, now that this Farm Bill is passed more and more farmers who are going to be able to grow this hemp for the use to then extract this oil from this plant to then use for medicinal purposes here in the U.S. So there’s one way to potentially make money in this industry, but then what I’m looking at here is the bottleneck of, now that the Farm Bill’s passed, more hemp is going to be able to be produced on the market. And as more and more research is done to show how CBD oil can help treat some of these illnesses and ailments out there. The bottleneck right now and where it will continue to be is in the middle to get the raw product or biomass to the end product that these companies can then put into their products and then sell to the consumer. I talked to one of my lenders actually the other day and was telling them how we’ve been getting into the CBD industry and he has a son with epilepsy and he says he gives his son CBD oil and he’s seen that it has gradually decreased the amount of seizures that he’s having. I talked to another one of my clients just yesterday who’s looking at getting involved in one of our private lending opportunities. And he told me that, uh, they give their children CBD every day. So I actually take it every day. It’s in the form of a Listerine strip. It’s a company that we’ve partnered with where we put CBD oil in a Listerine strip. Comes in the same type of packaging as a Listerine strip. But it’s obviously not Listerine and it’s something that, you know, I’ve been doing more research on and I’m taking myself, and my wife’s taking. So it’s something that I’m looking into in 2019 and beyond. And the legalization of hemp and growing hemp, uh, the production of hemp, analysts are telling, and this is from CNBC, that hemp could grow into a $20 billion industry by 2022. That’s three years from now. So I’m looking to get into this industry because of the fact that I believe that it helps people and I’m starting to see inefficiencies in the business because it’s not regulated just yet.
Private companies can go in and extract this crude oil from the plant, from the biomass, then convert it into an isolate which is then able, you can sell it to these companies and there’s big companies out there that are looking at starting product lines and putting CBD into these products. And I think very well my next private lending opportunity debt syndication could be to raise funds to start forming these facilities, putting these facilities together. Because I’m telling you right now, like I said, a lot of times the best investment opportunities out there are through solving a problem. And the problem that I’m seeing right now is there’s an increased demand and people looking for, consumer demand looking for products with CBD in it, right? And there is going to be more and more hemp biomass grown and available on the market because of the passing of the Farm Bill.
There’s already too few lab extraction facilities out there in the U.S. That can convert this biomass. There’s a huge, huge opportunity there and the profits and returns are enormous and so if you haven’t been looking into this, look into it. Now, the side effects are hilarious. I mean you know, you hear it from the pharmaceutical companies every time they have a new commercial for a new drug, there’s so many side effects and a lot of them sound, you know horrible. Well, with CBD the side effects are you might go to the bathroom a little bit too much. May increase your trips to the bathroom, it could cause a change in your appetite and, uh, it might make you fatigued. Not as gruesome as a lot of the other side effects that you hear from these pharmaceutical companies that are putting out all these other drugs.
And so I just think it’s something that you should look at. And like I said, this is free advice. This is from listening to the Real Estate Cowboys podcast. Like I said, I’ve been talking with my clients about this and other people that I’m friends with. You know, it’s just, it’s something that I think right now there’s a window that’s open to where we can get into this industry and I think we can make a lot of money. So if you have land, like I said, you could potentially use it to grow or you can lease it out to a farmer and then grow on this land or sell it to a farmer to grow on this land, whatever it may be. There’s opportunities there or you grow it yourself. Or there’s opportunities to, you know, loan money to get some of these facilities up and running.
Or I think, you know, eventually, there’s gonna be some of these companies that become publicly traded where it might be a good idea to just invest with them on the stock market. Either way, I see a huge demand, so type it into Google cannabis oil, CBD oil benefits, type that in, CBD oil research, and just start doing your due diligence. But I’m telling you there’s a real, real big opportunity here and it has already been an opportunity in Canada and now it’s becoming more and more of an opportunity here in the U.S., especially with the passing of this Farm Bill. So I would definitely take a look at this as a potential option for you in 2019 and beyond. Like I said, CNBC said, analysts told CNBC that hemp could grow to a $20 billion industry by 2020. Get a piece of that.
Okay, well that’s it for the first episode of 2019. This is your host, John Larson. If you liked what you heard today, about anything that I talked about, private lending, um, turnkey rentals still available. Still some good markets in the U.S. To invest in those depending on your goals. But I have ways that I can help supplement income, replace income, you know, really just build a true passive income stream in the form of double-digit returns. We have lifestyle investments. Like I said, if you’re on the cusp of retirement or retired, you have some money that you’re sitting on and you’re thinking to yourself, man, I’d love to, you know, retire down to the Caribbean or have a place down in the Caribbean that I could go to when I want and when I don’t want to go down there, I can have it generating income for me. I have opportunities there in Belize, Southern Belize, in Placencia. If you like what I had to say about the CBD opportunities, we are getting heavily involved in that. You know, if you’re interested in learning more about that or how you can help us raise money to and become part of, you know, this growing industry, reach out to us. RealEstateCowboysDFW.com, AREIUSA.com.
And like I said, this is probably going to be our next private money, debt syndication, which we’ll start probably here in February because I think I’m going to be able to close down this office building in North Dallas that we’re currently raising for by the end of this month by January 31st so we’ll be looking at starting a new raise in early February. There’s some big opportunities there. If you’re interested in wanting to get in the first row and get on the forefront of investing with us in this growing industry with cannabis oil, go to our websites area, RealEstateCowboysDFW.com, AREIUSA.com and put in your information and a member of our team will reach out with more information on how to get started. And so I want everyone to really, after you listen to this episode, start looking at setting some goals for 2019. Be careful what you invest in moving forward. Like I said, volatility with stocks, volatility with the real estate market, with the rising rates, don’t really know what to expect just yet for 2019, so set your goals. Use the SMART system, specific, measurable, agreed upon or attainable realistic time-based goals. So setting those goals for 2019, and when you’re ready to take action, we are here for you with passive income, real estate opportunities so you can still go ahead and live your life and, and you know, work your current job. No one’s asking you to retire from your job. There’s ways that real estate can pay you passively without even lifting a finger because you need to remember there’s nothing more important than your return on life. This is John Larson signing off. I’ll talk to you next week.
Announcer: All opinions expressed by the host of the show are the opinions of American Real Estate Investments LLC and do not reflect the opinions of guests or sponsors. No personal or professional advice on this program should be considered an endorsement to follow a real estate financing or investment strategy. Before acting on any information, seek advice from your financial tax, mortgage or real estate advisor, as the information is not guaranteed and investment strategies have the potential for profit or loss.