CurveBlock Blog

Investing in Uncertain Times


  • “The coronavirus pandemic could cause UK economic output to plunge by an unprecedented 15% in the second quarter of the year and unemployment to more than double, according to dire forecasts.”, “The deepest recession since the financial crisis is now all but unavoidable, according to analysts at the Centre for Economics and Business Research (CEBR), after businesses shut up shop and consumer spending fell dramatically as a result of lockdown restrictions.” https://www.theguardian.com/business/2020/mar/30/coronavirus-forecast-to-cut-uk-economic-output-by-15
  • “According to a recent International Monetary Fund (IMF) report, they are predicting a -6.5% drop in the UK economy.”, “As a result of the pandemic, the global economy is projected to contract sharply by –3 percent in 2020, much worse than during the 2008–09 financial crisis.” https://www.imf.org/en/Publications/WEO/Issues/2020/04/14/weo-april-2020

First, before reading this article, you should know I am no longer a licensed investment advisor. This article is purely my opinion and should not be taken as investment advice. You should fully research and understand your investment opportunities prior to investing and if necessary, seek professional investment advice.

When thinking about investing, most people consider the risk involved as we all should. However, the problem lies in not fully understanding those risks.  We tend to believe if we hold onto our cash, under a mattress or in a can in the garden, or in the bank, it is ‘safe’. Holding cash at home could be considered safe if the definition includes being able to visually see it and in the same location you saw it last. (As long as it is not stolen.) In the bank, we assume our cash is safe and the bank will pay interest on the money we hold in the bank. Unfortunately, interest rates around the world are typically less than 1%. The real risk in investing with these scenarios is, we lose purchasing power of our money. The £100 we hid away in the can in the garden this year will not buy the same number of products next year, meaning we loss purchasing power because what we have now buys less. To avoid the loss of purchasing power, we need to be investing our money in places other than cash. Cash reserves are something everyone should work towards. Once you have them, understanding how to deploy or investing that cash is the purpose of this article.

Another risk of holding cash in the bank in uncertain times is the possibility of losing access to that cash. Is that a risk you are willing to take? Greek banks have restricted access to cash as of March 2020.[1] There are reports that similar restrictions have occurred in the US, India, Germany and the EU all in 2020.  Banks restricting access to cash is a normal occurrence during difficult financial times so that banks can stay solvent. When you have a bank account, you are not the owner of the cash but a lender to the bank with a right to that cash. Banks do not have ‘your’ money on deposit in the bank for you to go and get any time you wish. In order to serve all customers, in uncertain times, banks will resort to limiting access to cash. This creates a problem when the ‘right’ opportunity comes along for investing and access to your cash has been restricted.

The possibility of limited access to cash brings up another question, should you pull out of investments that you are currently in?[2] The answer to that is simple. No. Unless it is an asset you expect will free fall when the lockdown is over. Most investment advisors will tell you to continue investing (dollar cost averaging) through the dips and downs of the market.  You cannot time the stock market; this is not a cliché but a proven fact, repeatedly. You can get ’lucky’ from time to time but people will most likely lose in the long run. So, you may be asking, is now the time to still be investing in the stock market?  I believe so, with a portion of your portfolio, if you understand what investments to consider and which segments of the market to invest in. If you do not understand this thoroughly, always educate yourself before investing, regardless of the current market conditions.

So, we can all agree we are in uncertain times. How do we invest, or should we be investing in these uncertain times? To answer that question, we must answer another question.

“What are the possible outcomes of these uncertain times?”

The answer is: The exact same as “normal” or more stable times.  The real question is, “Are we ever in certain times?” I would say no, as uncertainty is the certainty of time. That said, there are changes in the stability of the economy. The economy can only move in one of three ways; up, down or sideways, meaning no change.  Since no one has a crystal ball, it is impossible to know, for certain, what direction the economy will go. Are there investments we can choose that will perform well no matter the direction of the economy?  The answer to that question is unequivocally yes.

In order to determine those investments, we must look at uncorrelated assets, assets that don’t all move in the same direction under the same conditions.  We start with investments that have remained stable over time, precious metals is the first one that comes to mind. 

As you can see from this 300+ year chart, there are ups and downs with precious metals, over time, yet the trend is consistently up with a few aberrations after the Great Depression and after Black Friday. Precious metals are considered a stable investment and was one source that protected my clients when I was a Registered Investment Advisor.

Another investment that we should consider is real estate.  Is all real estate good in all economic markets? No. For instance, if you hold commercial real estate and the demand for commercial real estate drops, you will likely lose money.  If you are investing in mortgages or rents and the economy tanks and people can’t pay their mortgages or rents, you will likely lose money.  If you are investing in traditional bank funded developments and the bank stops funding because the economy has dropped, you will likely lose money. 

There are other considerations in the current real estate market when thinking about commercial real estate. Every company has been forced into remote working scenarios, furloughs or layoffs.  Many of the remote working companies did not previously allow remote work for a variety of reasons. I was told about one company, once they went to remote work, they saw a 25% increase in productivity. I propose that companies are going to recognize the benefits of remote work and many workers will not return to an office when the lockdown is over.  Many small businesses will simply not be able to recover even with government bailouts. These changes will lead to less demand for commercial office space and increase vacancies across every country. It will have a devastating effect on commercial real estate prices and returns.

Mortgage lending has already taken a hit in the US and I expect this to be the first shot across the bow of the pending devastation to the housing market in the US. JPMorgan Chase has raised the requirements for getting a mortgage to a minimum of 20% down and a 700 credit score.[3] According to Experian, one of the major credit monitoring companies in the US, the average credit score in the US was 703 in the second quarter, prior to the economic impact of the The Great Lockdown. This means that by now, the average score has already fallen below the Chase minimum. I believe Chase will not be the only lender to adopt these requirements, they are simply the first. Mortgage applications have already fallen to the lowest level since 2015[4] and with ongoing high unemployment (some reporting as much as 30%), there is no reason to think this trend will not continue. You might be asking; what does this have to do with the UK? This is simply a sign of the times and is affecting all of us globally. This is not a looming global financial crisis, but one already upon us.

Find the right place to continue investing for you, even if we do see a downturn, investing in the right place now will be good for you in the future.

[1] https://www.keeptalkinggreece.com/2020/03/24/greece-lockdown-coronavirus-banks-restrictions/

[2] https://www.cnbc.com/2020/03/16/should-you-buy-stocks-in-a-falling-market.html

[3] https://www.foxbusiness.com/money/jpmorgan-chase-mortgage-borrowing-standards-as-coronavirus-economic-outlook

[4] https://www.zerohedge.com/personal-finance/mortgage-purchase-applications-crash-35-yoy-lowest-5-years

” The OBR expects a more lasting impact on unemployment, which is estimated to rise by 2.1 million to 3.4 million by the end of June.

Under this scenario, unemployment would hit 10%, from its current 3.9% rate, before easing to around 7.3% at the end of the year.”




https://finance.yahoo.com/news/coronavirus-uk-growth-could-drop-111806690.html

How do you make money in real estate in all markets?  Historically, people created wealth with real estate in both down markets and up markets. How?  The common denominator is they had a strong cash position. In other words, they had cash reserves available to invest in all market conditions, especially in a declining economic environment. Is it possible to have a cash position and not be able to take advantage of a declining economy? Yes, let’s consider why.

As I already stated, access to cash is not a guarantee in uncertain economic conditions. All we have to do is look back to 2008 to see bank closures and restricted access to cash under a falling economic system.[1]  We have seen throughout history, every major country has either completely stopped or limited cash access at various times throughout history and as recently as March 2020.  While some might think it would be better to hold onto cash during uncertain times, it may in fact be better to find investments that will likely perform well regardless of the economic outcome of the current uncertain time.  Better to invest your cash than leave it in a bank that may restrict access to your funds if the economy tanks.

All these economic conditions will most likely lead to recession. The IMF is predicting a temporary slowdown in the economy with a return to 4% growth in 2021.[2] While I am not an economist, I have enough credits for a minor degree in economics and enjoy and understand the topic. I have always wondered; why, if economists understand the markets so well, are they not all wealthy and retired? The answer is simple, they run predictive analytics that are NOT always accurate. Scott Anderson, chief economist at Bank of the West in San Francisco wrote in a note to clients, “Economic models are incapable of forecasting what comes next, since we have never seen anything like it in the post-war period on which economist models are trained. Policymakers are literally flying blind and making things up as they go along.”[3] Thankfully, we do not need predictive analytics to see that with a jobless rate at more than double the rate prior to the lockdown (and expected to last until 2023) the economy will not grow like it did prior to the lockdown. We will most likely be in a global recession.

So, here is the good news. Again, we ask, where do we invest given this economic outlook? When markets are down, and I am referring to any market, it is a buying opportunity for those who are liquid, meaning they have available cash.  Today, most of you still have access to your cash. Most banks have not started restricting access. So, take this opportunity to determine what investments you can take advantage of. The buying opportunities have begun. Investing in those opportunities should be done NOW.  Don’t take a ‘wait and see’ approach. You will most likely miss the opportunity. Invest now, while you still have access to cash and before the opportunities pass you by.  Sitting on the sidelines, waiting to see what will happen and how this whole mess will work out will cause you to miss some of the best buying opportunities of your lifetime.

Again, this is article is not written as investment advice. You need to already understand and be educated on the opportunities you are considering or seek professional investment advice.


The author, Joey Jones is a Co-Founder and Chief Revenue and Compliance Officer at CurveBlock LTD. Joey owned and operated a Registered Investment Advisory firm with 37 geographically dispersed agents which he successfully exited.

[1] https://www.theguardian.com/business/2008/dec/28/markets-credit-crunch-banking-2008

[2] https://www.imf.org/en/Publications/WEO/Issues/2020/04/14/weo-april-2020

[3] https://changematters.bankofthewest.com/2020/04/03/only-the-tip-of-the-iceberg/

Getting to YES; the process of achieving planning approval

CurveBlock- Wallington development: The Story so far.

We recently announced first stage approval has been granted. Our involvement in the Wallington development spans 12 months. Below is the history of the site thus far. The challenges faced in UK construction planning approval lend to the incredible potential for profits upon successful completion of this process, IF you have the skill and knowledge necessary to surmount the many hurdles.

Our initial introduction to the site was in November 2018 and was made via the retained marketing agent.  After initially deciding that the opportunity was not feasible due to the design and aesthetic of the existing building, a curiosity began to build that there was in fact a real opportunity to turn this horrible building into something worthwhile – both in design and financial terms.

The following 3 months involved the viewing of the building and its surroundings on numerous occasions and a number of meetings with our architects and planners to determine the potential of the existing building and any further potential that it may offer. In early February 2019 we concluded that the building had the ability to be converted under a Prior Approval Notice into 4/5 flats AND had further potential for up to 7 additional flats on the roof and at the side. This led to an offer being made to the retained agents at the advertised asking price and the acquisition being agreed in early March.

Whereas most property TV programs will assure you that this is it, deal done and everything else is plain sailing, unfortunately this was the beginning of the numerous issues we have had to encounter and overcome in the following 11 months.

The property we had agreed to buy was a first-floor office, with ground floor entrance and car park. We had also been advised that we would have the ability to extend the building upwards. The issue we encountered was that the property was held under a ‘flying freehold’[1] which effectively means that it sits atop another freehold title[2]. This is uncommon, but not unheard of in UK property, it did mean that there was legal uncertainty as to which of the freeholds would be ultimately responsible for the structural integrity of the building. Coupled with this was also a legal query as to which of the freehold titles ultimately owned the legal right to extend the building upwards.

At this stage, after spending a considerable sum on legal bills (we had also agreed to cover the vendors legal costs as part of the transaction), we decided that although we could gain planning permission for our intended development, we would have serious concerns as to whether the buyers of the completed units would be able to secure a mortgage. Unfortunately, in late June we decided that it was no longer feasible to continue.

What followed was the realization that we had potentially wasted almost 8 months and had a considerable abortive bill. We had to inform the owners, our design team and finally the marketing agent – firstly to thank them for their assistance and involvement, but ultimately to say we would be unable to progress further.

The conversation with the agent was painful for both sides and is not a conversation anyone enjoys having or having to make that call in the first instance. It is a conversation most would seek to avoid having in person, but would instead deal with via email, text, WhatsApp etc.

If you take one piece of advice from reading this article, please let it be this:

‘No matter how hard the issue, do not avoid it. Confront it, and deal with it head on’.

The conversation with the agent developed rapidly from joint dismay, to exactly how this transaction could be resurrected. Following our lengthy legal advice, the only way this could continue would be to acquire the ground floor freehold in a linked transaction with the flying freehold – the catch? It would mean acquiring two titles from different sellers (with different solicitors) for the same figure we had agreed at the outset. Despite this seeming like an uphill struggle, the conversation with the two freeholders progressed at pace over the following 3-4 weeks and in mid-July we received fresh contracts from both freeholders.

The legal conveyancing started again in earnest and gave us confidence to submit our Permitted Development application (planning application) to the Local Authority in August. Once again, we thought that we had regained control of our own destiny – after all, the statutory period for a planning authority to determine a Permitted Development application is 56 days/ 8 weeks.

What followed was a number of queries from the planning department about various aspects of the scheme. Each query then had a requirement to produce further drawings, amend the existing drawings or to instruct further specialist reports to accompany the application. Whilst we have an extremely diligent professional team around us, each variation to the initial application required the planning department to reconsult the surrounding neighbours and various other Council departments. Although seemingly a straightforward process the statutory period for consultation is 3 weeks, so for every change, the clock reset.

Finally, in January 2020, with all boxes seemingly ticked, the final curveball. The Environmental Health department requested a further acoustic survey be undertaken of a nearby commercial premises. This report was quoted, instructed and carried out within 48 hours of this request, with the accompanying report issued inside 4 days. Following submission of this final report, the Local Authority finally issued the Prior Approval Notice on 13th February. This will allow us to complete on the purchase of both freehold properties in March 2020 and physical works on site to commence in due course.

We have also now been able to submit the formal planning application for the second phase of development.


[1] https://www.lexology.com/library/detail.aspx?g=bb83c467-6a2d-4b74-8504-9feeea3b36f8

[2] ownership of property with the right to pass it on through inheritance.

Commercial Banks the enemy or the friend of digital equity?

What CurveBlock has known from the very beginning is everything will eventually be tokenized.

What does “tokenized” mean?

Tokenized means everything will have a digital, trade-able identity in the form of a legally recognized token or digital representation.  Today when you buy a car, you are given the paper title of that car to show your ownership.  The only difference with a token is that the title is electronic or digital.  In other words, a token.  Ultimately, this will make for faster and more efficient transactions for everything from buying a home to buying stocks or bonds and yes, even cars.  We have not reached this point yet because the token or contract that represents that token, called a smart contract, is still not recognized as law and has yet to be challenged in a court of law. There is a strong argument that supports smart contracts as legally binding under the Electronic Signatures in Global and National Commerce Act (ESIGN Act) and the Uniform Electronic Transactions Act (UETA).  While I am no attorney, people that do understand this area of law at the Digital Chamber support this understanding, that smart contracts are already covered and need no additional law and in fact, additional law would only stand to confuse the situation.[1] States need to be encouraged to look to the existing laws instead of confusing the situation and could do so simply be recognizing the existing laws publicly.  This would be a big step in adoption.

As of 18 January, Hawaii is looking to take steps towards adoption with a new bill introduced that would both allow banks to hold or custody, your digital tokens and allow the courts to hear digital asset claims (which again is arguable not needed).[2]

While Hawaii would not be the first place to allow banks to hold your digital assets, it would be the first in the US for a purely commercial bank.  Wyoming has instituted a law for companies to custody digital assets, but commercial banks would argue these are not the same as banks which is not a discussion for this article.  Switzerland on the other hand, is the first to allow a commercial bank to custody digital equity.[3]

Seeing commercial banks entering this digital equity space is exactly what we at CurveBlock saw coming in the beginning.  We are now, starting to see the commercial world joining us which will only stand to drive faster and bigger adoption of the technology.  All of this adoption and growth will only stand to support and increase the growth of the companies with solid business models in the digital equity space, like CurveBlock.

If you are not familiar with what CurveBlock is doing, we invite you to explore and learn more here on our website.

Joey Jones Co-Founder/Chief Revenue & Compliance Officer


[1] https://digitalchamber.org/policy-positions/smart-contracts/

[2] https://finance.yahoo.com/news/hawaiian-bill-let-banks-act-210021041.html

[3] https://www.coindesk.com/swiss-banks-enter-the-age-of-bitcoin

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