Suitable Investors

If you were to ask, “Who is the ideal client for 2nd Market Capital Advisory?”, our immediate answer would be, “Anyone”.  After all, we have long held that REITs TOUCH EVERY ECONOMIC SECTOR, and we know REITs well. 

Attempting to be less glib, we will, from time to time, profile actual clients and explain how we invest for them. 

D,  (names are changed to protect the innocent), is a 90-year-old retired educator.  After my mother, Alice, died at 97 in January 2025, D ascended to a position of prominence within our firm. Beginning work with me in April 1985, she now has a longer tenure than any other 2MCAC client. 

Some, but not all, of what we do for D is day-trade stocks. 

Day trading might bring to mind Meme stocks or cryptocurrencies, but our activity is more mundane and less headline-worthy. We trade obscure yet fundamentally secure REIT equities that we analyze thoroughly and continuously. These issues are always on our radar. If we don’t currently own them, market pricing may become attractive to make them a candidate for purchase. Sometimes geopolitical or macroeconomic news will move an issue dramatically, whether or not the news has any bearing on the operational fortunes of the issuing company. That’s where the day-trading comes in. 

Our basic investment thesis is to buy issues at a discount to their intrinsic Net Asset Value, Book Value, or Par Value. Often, that discount is accompanied by an outsized dividend yield, and we proceed with the anticipation that dividends and capital appreciation will, ultimately, combine to produce a satisfactory return on investment. 

We may have never owned the issue, may have sold it, or even own it currently.  When we determine that an issue’s markets have sufficiently dissociated from reality and real value, we are ready to shift to a day-trading perspective. But first, we created the tools to make day-trading work efficiently. 

Back in early 2021, we attempted to negotiate more investor-friendly trading terms with many major custodians. Trading costs reduce investment returns, so zero commission costs were a must. Additionally, one of our objectives was to contract low borrowing rates for every transaction, not just the huge ones. Today, our clients enjoy the lowest margin rates in the nation, even if they are borrowing just $1. 

These tools, combined with constant market vigilance, allow us to confidently pursue enhanced returns through short-term trading strategies. When prices are out of whack with the issues we follow, we can take our positions, affordably borrow funds if necessary, and lighten up or exit the position when prices more closely approximate normal. Success is realized through the capture of dividends and share price appreciation. 

While “day trading” is a term that has gained notoriety and is associated with risk, acting on market price moments is one of the specialized approaches we utilize to achieve returns for our clients; it is in addition to core portfolio management practices. We trade both little-known and well-known securities, day trade, and conduct long-term holds that allow for opportunities to be captured for any client. 

Our trading tools and constant/active market presence make this enhanced investment practice more appropriate for any investor, regardless of age or means. 

We’ll check in again when D turns 100. 

Notes and Disclosure

Articles are provided for informational purposes only. They are not recommendations to buy or sell any security and are strictly the opinion of the writer. The information contained in these articles is impersonal and not tailored to the investment needs of any particular person. It does not constitute a recommendation that any particular security or strategy is suitable for a specific person.  Investing in publicly held securities is speculative and involves risk, including the possible loss of principal. The reader must determine whether any investment is suitable and accepts responsibility for their investment decisions.

Commentary may contain forward-looking statements that are by definition uncertain. Actual results may differ materially from our forecasts or estimations, and 2MCAC and its affiliates cannot be held liable for the use of and reliance upon the opinions, estimates, forecasts, and findings in this article.

Past performance does not guarantee future results. Investing in publicly held securities is speculative and involves risk, including the possible loss of principal. Historical returns should not be used as the primary basis for investment decisions. Although the statements of fact and data in this report have been obtained from sources believed to be reliable, 2MCAC does not guarantee their accuracy and assumes no liability or responsibility for any omissions/errors.

We routinely own and trade the same securities purchased or sold for advisory clients of 2MCAC. This circumstance is communicated to clients on an ongoing basis. As fiduciaries, we prioritize our clients’ interests above those of our corporate and personal accounts to avoid conflict and adverse selection in trading these commonly held interests.

Hypertext links to other sites are provided strictly as a courtesy. When you link to any of the sites provided on our website, you are leaving this website. We make no representation as to the completeness or accuracy of information provided on these websites. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, websites, information, and programs made available through this website. When you access one of these websites, you are leaving our website and assume total responsibility and risk for your use of the websites to which you are linking.

Suitability.  Information contained herein is impersonal and not tailored to the investment needs of any particular person. It does not constitute a recommendation that any particular security or strategy is suitable for a specific person.  Implementation of any strategy is dependent upon its suitability in light of a client’s financial situation and risk tolerance.  Readers are encouraged to contact 2MCAC or their financial professional to discuss the suitability of any strategies or holdings prior to implementation in their portfolio.

Day Trading Risk. Day trading involves risk, particularly for those using margin. Day trading generally is not appropriate for someone with limited resources, limited investment or trading experience, and low risk tolerance.

Margin Risk. Subject to applicable margin requirements and other limitations, our Asset Management clients may borrow funds in order to make additional investments and thereby increase both the possibility of gain and risk of loss. Consequently, the effect of fluctuations in the market value of an underlying investment vehicle or a client’s portfolio would be amplified.  

*Client names have been changed to protect their privacy