Shawn Ryan Show - Episode #161: Rob Luna on 2025's Million-Dollar Question: Where to Invest & Will DOGE Trim the Fat?

Release Date: January 20, 2025
Host: Shawn Ryan
Guest: Rob Luna, #1 Ranked Wealth Strategist and Author of Closure, Wealth Gap

Introduction

In the 161st episode of the Shawn Ryan Show, host Shawn Ryan welcomes back Rob Luna, the nation's top wealth strategist and author of Closure, Wealth Gap. As the new year unfolds amid significant economic and political shifts, Ryan and Luna delve into critical investment strategies, the evolving real estate landscape, the future of the stock market, and the burgeoning role of cryptocurrencies like Dogecoin (DOGE).

Real Estate Investments in 2025

Buying vs. Renting:

Rob Luna opens the discussion by addressing a common dilemma: whether to buy a home or rent, especially for individuals aspiring to start businesses or purchase properties. Luna emphasizes that the decision transcends mere numbers, highlighting the intangible benefits of homeownership such as stability, community, and equity growth.

Rob Luna [03:06]: "I don't think you could really put a dollar amount on that from my opinion. You know, I rented for about three years. It was really the worst experience of my life... making that payment into your home over 10, 20, 30 years, you're building real equity because real estate goes up over time."

Impact of Institutional Investors:

Luna warns about the increasing presence of institutional giants like Blackstone and KKR in the single-family home market. These entities are transforming homeownership by converting purchased homes into rental units, thereby driving up prices and reducing affordability for average Americans.

Rob Luna [21:27]: "These new buyers are now creating that stability to where you can now have a single-family house... Now the single-family home has become what's called an institutional asset class."

Regional Markets: Tennessee vs. California:

The conversation shifts to regional real estate dynamics. Luna praises the rapid growth in states like Tennessee, Texas, North Carolina, and Florida, citing lower taxes and business-friendly environments as key drivers. Conversely, he points out the stagnation and even decline in high-priced markets like California, attributing it to factors such as rising crime rates and limited land availability.

Rob Luna [06:35]: "What you're saying, Rob, is spot on... Maybe we'll talk a little bit about interest rates, but 7% interest rates, that's kind of historic."

Land Investments:

Discussing land as an investment, Luna outlines its potential for long-term appreciation, especially in developing areas. However, he cautions that raw land doesn't generate immediate income and requires patience for value growth.

Rob Luna [12:17]: "The challenge with land is if you're someone who... you have to have the money to be able to wait for that. So, for example, if you're looking to buy... buying that with the idea if you can wait seven to 10 years, it's probably going to be a good investment."

Stock Market Outlook for 2025

Market Resilience and Volatility:

Rob Luna reflects on the unprecedented market behavior in 2024 and predicts continued resilience coupled with heightened volatility in 2025. He advises investors to remain cautiously optimistic, anticipating fluctuations influenced by the new administration and global events.

Rob Luna [29:21]: "Yeah, what I didn't expect was 2024. It was a huge year... the resiliency of this market, I think, based off of what's going to be happening with the new administration, in my view, has been shocking."

Sectors to Watch:

1. Technology:

   • Cybersecurity and AI: Luna asserts that technology, particularly cybersecurity and artificial intelligence, will remain dominant sectors, driving efficiency and future profits.

     Rob Luna [31:47]: "Technology is what is creating... the more consistent, the faster growing, the more reliable those profits are, the more that stock is going to continue to go up."

2. Energy:

   • Utilities and Renewable Energy: He highlights the rising importance of utility companies in supporting the new technological infrastructure, such as data centers and AI systems.

     Rob Luna [31:47]: "Energy... utility companies... utility companies go up 50, 60, 70% for precisely the reason... to create this new economy."

3. Health Care:

   • Uncertainties Ahead: Luna expresses caution regarding the health care sector due to systemic issues and potential regulatory changes under the new administration.

     Rob Luna [35:16]: "There are so many questions around that... one of the biggest differences I've seen... do you have a mortgage payment versus no mortgage payment."

4. Real Estate Investment Trusts (REITs):

   • Diversification and Stability: Despite recent downturns, Luna sees REITs as a viable option for exposure to real estate without direct property ownership.

     Rob Luna [36:57]: "I do believe there’s going to be a stabilization. I do believe in real estate. So real estate investment trusts are another area that I’d be looking at."

5. Psychedelics and Emerging Sectors:

   • High-Risk, High-Reward: Luna encourages diversification into speculative sectors like psychedelics, advising investors to spread their investments to mitigate risks.

     Rob Luna [37:04]: "I would say start doing the research... these are areas which we call them 10 baggers... that could be the things that do a 10x return."

Cryptocurrency and Alternative Investments

Bitcoin and Dogecoin (DOGE):

The discussion transitions to cryptocurrencies, with a focus on Bitcoin and DOGE. Luna acknowledges the growing interest driven by narratives around government spending cuts (DOGE) and potential regulatory support from the new administration.

Rob Luna [46:57]: "Whenever you look at, there's a few... the narrative is super important though... They're using it as a store of value and also a hedge."

Role as a Hedge:

Luna debates the efficacy of cryptocurrencies as hedges against traditional economic uncertainties, suggesting that while they offer diversification, they should only constitute a small portion of an investment portfolio due to their volatility.

Rob Luna [59:39]: "But I think there's enough now with this new... having a little bit of an element allocation to it's pretty good."

Precious Metals:

Highlighting traditional hedges, Luna discusses the role of gold and land as more reliable stores of value compared to crypto assets.

Rob Luna [66:17]: "Gold is probably one of the oldest... land is one of those things. Oil... that's probably one of the things that you want to have to hedge against the dollar."

Government Policy and Economic Implications

Budget Deficit and Monetary Policy:

Luna emphasizes the critical issue of the growing budget deficit and the limited tools available to the Federal Reserve, primarily interest rate adjustments, to manage economic stability.

Rob Luna [47:25]: "The dual mandate meaning they have to do two things. They have to keep a lid on inflation... and make sure people have jobs."

Fiscal Policy and Business Incentives:

He critiques the lack of effective fiscal policies aimed at stimulating business growth, advocating for incentives that support small businesses and entrepreneurship over blanket spending measures.

Rob Luna [50:44]: "What I’m hoping is there’s going to be more than that. And... I’m looking forward to lower regulation."

Regulatory Burdens:

Luna argues that excessive regulation stifles small businesses, using his own experiences in the financial services industry as evidence of how regulatory challenges can impede growth and innovation.

Rob Luna [76:42]: "Regulation in itself is not a bad thing, but regulation for the sake of regulation is just a lot of fat that doesn’t help anybody except regulatory."

Investment Strategies and Advice

Dollar Cost Averaging and Diversification:

Rob Luna advises investors to employ dollar cost averaging to mitigate the risks associated with market volatility. He also stresses the importance of diversifying investments across various sectors and asset classes to enhance portfolio resilience.

Rob Luna [29:25]: "Use some of these pullbacks, use some of the scare, use some of the fear, use some of the disappointments... Use those as opportunities to buy."

Focus on Technology and Energy:

Luna recommends concentrating investments in technology and energy sectors, deeming them future-proof due to their integral role in advancing productivity and supporting new economic infrastructures.

Rob Luna [31:47]: "Technology is the number one sector out there... energy... utility companies are going up for the reason."

Embrace Entrepreneurship:

Highlighting the importance of entrepreneurship, Luna encourages individuals to create their own income streams through business ventures. He underscores the vulnerability of relying solely on traditional employment amid rising automation and economic shifts.

Rob Luna [70:18]: "Start focusing on how do I become an entrepreneur... create my own income, control my own future."

Invest in REITs:

For those unable to directly invest in real estate, Luna suggests REITs as an alternative to gain exposure to the property market while benefiting from features like depreciation and dividend income.

Rob Luna [36:57]: "Real estate investment trusts are another area that I’d be looking at."

Conclusion

In this insightful episode, Rob Luna provides a comprehensive overview of the investment landscape anticipated in 2025. From navigating the complexities of the real estate market dominated by institutional players to capitalizing on resilient sectors like technology and energy, Luna offers strategic advice tailored for both seasoned investors and newcomers. He underscores the importance of financial literacy, diversification, and proactive entrepreneurship as cornerstones of financial security in an ever-evolving economic environment.

Rob Luna [70:18]: "Focus on how do I become an entrepreneur... create my own income... start focusing on... own your own income."

As Shawn Ryan and Rob Luna wrap up, they emphasize the critical need for education and strategic planning to navigate the uncertainties of the new year effectively.

Notable Quotes:

• Rob Luna [03:06]: "Making that payment into your home over 10, 20, 30 years, you're building real equity because real estate goes up over time."

• Rob Luna [21:27]: "The single-family home has become what's called an institutional asset class."

• Rob Luna [31:47]: "Technology is what is creating... the more consistent, the faster growing, the more reliable those profits are."

• Rob Luna [37:04]: "These are areas which we call them 10 baggers... those could be the things that do a 10x return."

• Rob Luna [66:17]: "Gold is probably one of the oldest... land is one of those things."

• Rob Luna [76:42]: "Regulation for the sake of regulation is just a lot of fat that doesn’t help anybody except regulatory."

Final Thoughts:

Rob Luna’s expertise provides listeners with actionable insights into where to invest in 2025, emphasizing the significance of adapting to market changes, understanding the impact of institutional investments, and leveraging emerging sectors. His emphasis on entrepreneurship and financial education serves as a guiding principle for individuals aiming to secure and grow their wealth in a complex economic landscape.

For those who missed this episode, tune in to the Shawn Ryan Show on your preferred podcast platform to gain valuable investment strategies and economic insights from top experts like Rob Luna.