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<ul class="summary-list"><li>Saudi Arabia has invested billions of dollars into tech overseas in recent years.</li><li>The kingdom is now looking for overseas tech companies to invest in it, according to Bloomberg. </li></ul>In his ascendance to power, <a target="_blank" class="" href="https://www.businessinsider.com/saudi-arabia-crown-prince-mohammed-bin-salman-mbs-2023-10">Mohammed bin Salman</a> spent years investing Saudi Arabia's oil money in the global tech sector. The crown prince's kingdom appears to be ready for some of that favor to be returned.Rather than prioritizing investments in overseas tech companies, Saudi Arabia is looking to them to bring investment and resources to the Middle East as it seeks to capitalize on the AI boom and become a force of its own in the rapidly growing sector.The latest signs of this shift came on Wednesday after <a target="_blank" href="https://www.bloomberg.com/news/articles/2024-11-06/saudis-plan-100-billion-ai-powerhouse-to-rival-uae-s-tech-hub">Bloomberg reported</a> that Saudi Arabia had plans for an up to $100 billion AI project that aims to not only prioritize the local tech industry but also encourage large tech companies to "put resources in the country.""Project Transcendence," as it is known, aims to make Saudi Arabia a place with all the components needed to advance AI: data centers housing the GPUs that train and run AI models, well-resourced startups at the cutting edge of innovation, and a globally sourced talent pool. According to the Bloomberg report, it also aims to build a "national champion" in AI. The crown prince, known as MBS, <a target="_blank" class="" href="https://ai.sa/">initiated a national AI strategy in 2020,</a> well before the current boom. But several factors have emerged since then for his nation to think hard about what it can do to accelerate the development of a resilient AI industry at home — and who it can get some help from.<div type="image" title="MBS" height="3043" width="4300" msid="115061833" hostid="261" sizebytes="382254"></div>One reason is that there has been an investment step-up in AI since the <a target="_blank" class="" href="https://www.businessinsider.com/everything-you-need-to-know-about-chat-gpt-2023-1">launch of ChatGPT</a> in late 2022, raising the stakes for Saudi Arabia as it battles neighboring rivals like the UAE for regional supremacy. Emirati state Abu Dhabi, for instance, is home to G42, a domestic company with an advanced <a target="_blank" href="https://www.g42.ai/resources/news/meet-jais-worlds-most-advanced-arabic-llm-open-sourced-g42s-inception">Arabic large language model</a>. It has also attracted $1.5 billion of investment from Microsoft. Bloomberg's report said Saudi Arabia planned to build its own version of G42.Another reason is weakening oil demand, a resource that has made the kingdom the central economic force of the Middle East for the better part of a century.An <a target="_blank" href="https://www.imf.org/en/Publications/CR/Issues/2024/09/03/Saudi-Arabia-2024-Article-IV-Consultation-Press-Release-Staff-Report-and-Informational-Annex-554530">IMF report in September</a> highlighted the ongoing decline in the country's oil revenue as the calendar speeds through to 2030; a decade-high of 857 billion riyals in 2022 ($228 billion) is projected to fall to 778 billion riyals ($207.1 billion) by 2029. Signs of weakening demand showed themselves this week, too, as state-owned oil giant <a target="_blank" href="https://www.aramco.com/-/media/publications/corporate-reports/reports-and-presentations/2024/q3/saudi-aramco-q3-2024-interim-report-english.pdf">Saudi Aramco reported a 15.3% year-on-year decrease</a> in third-quarter net income from $32.6 billion to $27.6 billion.Diversification away from oil has been a front-and-center issue for the kingdom's leaders for some time. It is a central focus of the <a target="_blank" class="" href="https://www.businessinsider.com/saudi-arabia-vision-2030-projects-trillion-value-neom-2024-9">grand Vision 2030 project MBS launched in 2016</a>, which includes mega-infrastructure projects like Neom. It is also a top priority for decision-makers at the Public Investment Fund, Saudi Arabia's giant sovereign wealth fund.The fund — chaired by MBS — has served as a crucial diversification tool for Saudi Arabia, <a target="_blank" class="" href="https://www.businessinsider.com/saudi-arabia-public-investment-fund-global-investment-spree-2024-8">leading an investment charge into top tech names</a> like Uber and SoftBank's first Vision Fund, a venture capital vehicle that bet on over 90 companies with $45 billion from the Saudis. The kingdom doesn't seem to want to keep up the pace of overseas spending it has previously had, however.Last month, PIF governor Yasir Al-Rumayyan told attendees of the Future Investment Initiative in Riyadh that the fund was preparing to allocate just 18 to 20% of its capital to overseas opportunities, <a target="_blank" href="https://www.ft.com/content/5004fbc6-23e2-4b9f-9885-14e1ea724ce2">the Financial Times reported</a>. That's a notable drop from the 30% allocated at the start of the decade.Overseas investment in AI looks set to continue, though. In March, The New York Times reported that the PIF was in early talks with Silicon Valley venture capital firm Andreessen Horowitz for a <a target="_blank" class="" href="https://www.nytimes.com/2024/03/19/business/saudi-arabia-investment-artificial-intelligence.html">$40 billion AI fund.</a> Should that materialize, it would be a significant force in the global AI investment space. <div type="image" title="Yasir al-Rumayyan" height="852" width="1093" msid="115061832" hostid="261" sizebytes="47602"></div>It remains to be seen how Project Transcendence might play out, but it could lead to Saudi Arabia announcing new developments, companies, and projects alongside key names from beyond its borders to bolster its AI activity at home.There are already examples of the country turning to overseas tech companies. California-based AI company Groq, for instance, <a target="_blank" href="https://groq.com/unleashing-the-power-of-fast-ai-inference-groq-and-aramco-digital-partner-to-establish-world-leading-data-center/">unveiled a partnership</a> with an arm of Saudi Aramco in September that will oversee the development of an AI data center in the country. In October, Google Cloud and the PIF announced a partnership to develop an AI hub in the kingdom that, if approved, would see the two conduct joint research on Arabic language models and train "millions" of students and professionals.Saudi Arabia will want others to work with it, too, as it gets serious about becoming the Middle East's main stage for AI.

Saudi Arabia spent years investing in global tech firms. Its domestic AI push hopes they'll return the favor.

<ul class="summary-list"><li>Billionaire investor Bill Gross says the stock market's record-breaking run is set to slow.</li><li>He recommends that investors reposition toward defensive and high-yielding stocks.</li></ul>Though this year's record-beating stock rally <a target="_blank" href="https://markets.businessinsider.com/news/stocks/stock-market-outlook-goldman-sachs-boosts-sp500-price-target-again-2024-10#:~:text=Goldman%20Sachs%20raised%20its%20S%26P,trends%20should%20boost%20earnings%20growth.">continues to impress</a> Wall Street, billionaire investor Bill Gross isn't so sure the bull market will maintain its hot pace for much longer.According to the so-called Bond King's latest <a target="_blank" href="https://williamhgross.com/investment-outlook-archive/">note</a>, investors should reposition toward defensive and higher-yielding stocks as momentum winds down. He also recommended low exposure to fixed income, having previously <a target="_blank" href="https://markets.businessinsider.com/news/bonds/bond-yeidls-bill-gross-rising-treasury-issuance-government-debt-deficits-2024-5">criticized current Treasury conditions.</a>"No bear market, but it's not the same bull market anymore," Gross said, adding that equities are set for "low buy positive" returns going forward.Gross also listed four of his favorite investments at present time:The first is <a target="_blank" href="https://markets.businessinsider.com/stocks/ale-stock">Allete</a>, an electric-service company that has risen 5% year-to-date. It's a buyout with 10% upside over the next 12 months, he said.Gross also touted multiple limited partnership pipelines, an investment he frequently emphasizes as a fruitful alternative to bonds. He cited that MLPs offer 8% tax-deferred yields. <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/bill-gross-investing-strategy-oil-gas-piplines-limited-partnerships-ai-2024-5">Back in May</a> he said that MLPs had been "almost as good as AI."On the theme of Treasury alternatives, Gross also cited <a target="_blank" href="https://markets.businessinsider.com/stocks/nly-stock">Annaly Capital Management</a>, a high-yielding mortgage REIT.He also sees <a target="_blank" href="https://markets.businessinsider.com/news/bonds/municipal-bonds-muni-recession-outlook-sahm-yield-curve-charles-schwab-2024-8">municipal income</a> funds as a worthwhile investment, as many have offered over 7% tax-free yields. Gross named the DWS Municipal Income Trust as one example but noted that there are between 20 and 30 others to choose from."7% may not last forever, but for now these funds trade at 6-8%," he said.Gross isn't going as far as to predict that the stock bull run is about to crash, only that a number of headwinds are around the corner. These range from extended valuations to an assortment of macroeconomic and geopolitical headwinds.Gross specifically cited higher corporate taxes under a Kamala Harris presidency, as well as stunted growth if military tensions keep escalating globally. Rising deficits — an issue the investor has <a target="_blank" href="https://markets.businessinsider.com/news/bonds/bill-gross-us-debt-crisis-deficit-inflation-federal-reserve-default-2024-2">repetitively warned against</a> — will eventually slow down spending.Gross also referred to the record cash pile held by legendary investor Warren Buffett, which some see as a <a target="_blank" href="https://markets.businessinsider.com/news/stocks/warren-buffett-record-cash-pile-stock-market-crash-signal-berkshire-2024-5">sign that the market could soon sell off sharply</a>. To Gross, it at least signals a "bumpy road ahead."His note also cited some positives to counter the listed headwinds, such as falling inflation and continued investment in artificial intelligence.

Billionaire 'Bond King' Bill Gross recommends 4 defensive investments for a bull market he sees losing steam

<ul class="summary-list"><li>John Hussman warns of poor S&amp;P 500 returns over the next 12 years.</li><li>High valuations suggest potential underperformance against Treasurys.</li></ul>Before investing in the stock market, <a target="_blank" class="" href="https://www.businessinsider.com/stock-market-crash-bubble-sp500-outlook-valuations-1929-2000-hussman-2024-9">John Hussman</a> urges investors to keep in mind that return outcomes ultimately have different probabilities based on when you buy in.While the <a target="_blank" href="https://www.businessinsider.com/personal-finance/investing/average-stock-market-return#:~:text=The%20S%26P%20500%20has%20returned,bonds%20or%20fixed%2Dincome%20assets.">S&amp;P 500 has averaged 10.5% annual returns</a> since 1957, that doesn't mean those are the average returns you'll get no matter when you enter the market."This is like stepping into a house with two rooms, one with the temperature at 0 degrees and one at 140 degrees, and expecting a temperature of 70 either way," said Hussman, the president of the Hussman Investment Trust who called the 2000 and 2008 crashes, in an October 17 note.Case in point, if you bought in on February 14, 2020, you'd be up 71%. But if you bought in just over a month later, at the bottom of the pandemic-driven crash on March 20, you'd be up 152% right now. They're both great outcomes, no doubt. But they're very different. And in business cycles where monetary and fiscal stimulus aren't as robust, the market can take a much longer time to recover.Right now, a few different variables show that investors should expect poor outcomes over the next 12 years if they were to invest in the S&amp;P 500 today, Hussman said.First, there are valuation levels. Hussman's go-to measure is the market cap of non-financial stocks divided by those stocks' total gross value added. The metric is at all-time highs, surpassing the largest bubble peaks in history.<div type="image" title="stock valuations" height="520" width="909" msid="114619204" hostid="261" sizebytes="35468"></div>Hussman likes it so much because it's been a fairly good predictor of 12-year market returns relative to 10-year Treasury returns. Here's the relationship between expectations and actual market returns. Current expectations have the S&amp;P 500 underperforming Treasurys by 9.9% annually over the next 12 years.<div type="image" title="expected vs actual market returns" height="526" width="911" msid="114619196" hostid="261" sizebytes="49876"></div>Then there's investor sentiment, which Hussman measures through the uniformity of movement in thousands of securities. In the chart below, when the measure goes flat like in 2000 and 2008, it's historically been bad for stocks.<div type="image" title="hussman market internals" height="522" width="915" msid="114619200" hostid="261" sizebytes="40814"></div>Finally, there's the accumulation of warning signs of market over-extension that rivals prior major downturn periods. The individual warning signs that Hussman monitors are various technical indicators, like the S&amp;P 500 being within 2% of its 5-year high while less than 72% of stocks are below their 200-day moving averages and 2.5% of stocks hit new both 52-week highs and lows at the same time, among other conflicting signals.<div type="image" title="hussman market over-extension signals" height="523" width="906" msid="114619202" hostid="261" sizebytes="38850"></div><h2 id="d60fe598-14e2-4ac5-a790-8f742704fa81" class="premium">Hussman's track record — and his views in context</h2>Hussman's outlook is often seen as extreme, and perhaps fairly so. But valuations are causing skepticism about future market returns among others on Wall Street, even if not to the same degree.Earlier this week, <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/stock-market-outlook-sp500-future-returns-decade-forecast-goldman-sachs-2024-10">Goldman Sachs forecast that the S&amp;P 500 would average 3% annual returns</a> over the next decade. That's less than the 4.2% annual yield that risk-free 10-year Treasurys offer.It's also worth remembering that Hussman's outlook is only for a 12-year period if you were to buy in now — not if you plan to hold for multiple decades.For the uninitiated, Hussman has repeatedly made headlines by predicting a <a target="_blank" rel="" href="https://www.businessinsider.com/stock-market-news-john-hussman-says-stocks-at-record-valuations-will-lose-two-thirds-2018-1">stock-market decline</a> exceeding 60% and forecasting a full decade of <a target="_blank" rel="" href="https://www.businessinsider.com/stock-market-news-market-bear-sees-decade-of-stock-losses-wall-street-mad-2017-11">negative equity returns</a>. And as the stock market ground mostly higher, he persisted with his doomsday calls.But before you dismiss Hussman as a wonky perma-bear, consider again his track record. Here are the arguments he's laid out:<ul><li>He predicted in March 2000 that tech stocks would plunge 83%, and then the tech-heavy Nasdaq 100 index lost an "improbably precise" 83% during a period from 2000 to 2002.</li><li>He predicted in 2000 that the S&amp;P 500 would probably see negative total returns over the following decade, which it did.</li><li>He predicted in April 2007 that the S&amp;P 500 could lose 40%, then it lost 55% in the subsequent collapse from 2007 to 2009.</li></ul>Hussman's recent returns, however, have been less than stellar. His Strategic Growth Fund is down about 55% since December 2010 and has fallen 16% in the past 12 months. The S&amp;P 500, by comparison, is up about 39% over the past year.The amount of bearish evidence being unearthed by Hussman continues to mount, and his calls over the past couple of years for a substantial sell-off began to prove accurate in 2022. Yes, there may still be returns to be realized in this new bull market, but at what point does the mounting risk of a larger crash become too unbearable?That's a question investors will have to answer themselves — and one that Hussman will keep exploring in the interim.

A notorious market bear who called the 2000 and 2008 crashes shares 3 signs it's a terrible time to invest in the S&P 500 — and warns stocks are due to underperform Treasurys by 10% over the next 12 years

<ul class="summary-list"><li>Investors boosted stocks after Donald Trump won a second term.</li><li>But investors shouldn't depart from their long-term investing plan, Morningstar's Dave Sekera says.</li></ul>Investors had a field day on Wednesday, <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/trump-election-win-stock-market-today-record-high-sp500-dow-2024-11">plowing money into the stock market</a> following the news that former president Donald Trump had won a second term. The S&amp;P 500 rose 2.5%, while the Dow Jones Industrial Average ended the day up a whopping 3.5%.But even as prices soar, it's important not to get caught up in the mania beyond your normal risk tolerance, warns Morningstar Senior US Market Strategist Dave Sekera."Don't let any of these dire headlines that you may see here in the short term dissuade you from your long-term investment objectives," Sekera said in a webinar on Wednesday morning."Based on your risk tolerance, I probably wouldn't be making any changes here today," he continued. "And when you do make changes, make sure that you're only making changes when there's really a change in your underlying fundamentals and only make changes in your portfolio based on an informed analysis."While not letting near-term developments derail your plan for your portfolio is classic advice, Sekera said there's another reason to be extra cautious: stock valuations are at some of their most expensive levels in the last decade-and-a-half."When I look at the market today, it is trading, with today's bump, probably a 3% to 4% premium above fair value," he said. "Now, a lot of investors may say, 'Eh, 3% to 4% doesn't sound like that much from a market point of view,' but when I look at our valuations going back to 2010, less than 20% of the time have we seen the market trade at this much of a premium or more."While Morningstar has its own proprietary valuation measures, common metrics show the S&amp;P 500 is indeed expensive. Below is the Shiller cyclically-adjusted price-to-earnings ratio, for example. It's a 10-year rolling average of the market's trailing 12-month PE ratio.<div type="image" title="shiller cape ratio" height="943" width="1242" msid="115062287" hostid="261" sizebytes="44672"></div>These valuation levels have prompted some <a target="_blank" class="" href="https://www.businessinsider.com/stock-market-crash-why-sp500-decade-weak-returns-goldman-jpmorgan-2024-11">top investment banks</a>, including Goldman Sachs, to warn of relatively poor returns in the coming decade.At the same time, investors are probably right to be excited about the prospect of lower taxes and regulation, Sekera said. Even what some investors may view as negatives, like tariffs and the potential inflation that could result from them, may end up being a boon for stocks, he said."From the stock point of view, for those companies that have pricing power, that actually could end up helping them generate some additional earnings growth," he said.If Republicans end up taking a majority in the House of Representatives alongside their victory in the Senate and the White House, bullishness around more tax cuts may especially be well founded, according to Sekera.Still, markets are unpredictable, and investors shouldn't overreact to events like elections, as there are many variables at play beyond who is in political power — like starting valuations. Sekera pointed to a recent article from his colleague John Rekenthaler, where he highlighted that oil stocks have done much better under President Joe Biden than they did during Trump's first term, despite their differing attitudes toward the fossil fuel industry.That's again why Sekera is urging restraint, with the market being expensive. That is particularly true for growth stocks, which trade at a "very large premium," he said.Value stocks and small-caps are where Sekera sees the most opportunity — especially in the latter."The small-cap space, even with today's bump, it's still the most undervalued part of the market in our view," he said.

Why you shouldn't get caught up in the post-election stock-market frenzy: Morningstar

India's investment ecosystem is undergoing a seismic shift, with index investing gaining unprecedented traction among investors, according to a report by Motilal Oswal. The younger generation, including Gen Z and Millennials, shows a stronger inclination towards index funds as compared to older investors. They also prefer index funds over ETFs for better returns and liquidity. A recent report by Axis AMC also highlighted the growing appetite for ETFs, which witnessed net sales of Rs 15,403 crore in October 2024. While 46% of younger investors favor index funds, only 35% of Gen X and Boomers do so. Millennials and Gen X investors also have a keen interest in factor or smart beta funds, reflecting their appetite for innovative, albeit aggressive investment strategies. Passive funds have become a core component of investor portfolios, with 80% of investors increasing their allocation to these funds in 2024, compared to 53% last year. The Axis report echoed similar sentiments, noting that net sales in the passive category inched up to Rs 8,025 crore in October 2024. The combined assets under management (AUM) of passive funds have surged from Rs 7 lakh crore in September 2023 to over Rs 11 lakh crore by September 2024—a 1.5x growth in just one year. The survey also noted a growing popularity of ETFs, with 57% of respondents investing in them, up from 41% in 2023. Of these, 26% invest solely in ETFs, while 31% have diversified between ETFs and index funds. This rising preference is matched by a commitment to long-term investment. A significant 81% of investors plan to hold their passive investments for over three years, highlighting sustained confidence in the growth potential of these funds. Sectoral indices like Nifty IT and Nifty Bank dominate as the top choice for passive fund investors, selected by 67% of respondents. Benchmark indices such as the Nifty 50 and Nifty 500 follow closely, preferred by 61% of investors. A recent, similar report by stock broker Angel One also throws a spotlight on how young India plans and prefers mutual funds when it comes to savings and investments. The report, titled "Young Indians' Saving Habits Outlook 2024," compiled by Fin One, stated that 45% of respondents aged 22-35 have made it a point to save up some of their savings in mutual funds. A year ago, this figure stood at just 32%. Most of these investors make their way into mutual funds via SIPs, or systematic investment plans. 52% of respondents in the age cohort of 22-35 are now using SIPs to invest in mutual funds, up from 44% in the previous year. As for what was the driving factor behind beginning their investment journey, 42% underlined the past performance of funds, while 38% noted that advice from financial advisors remained a key consideration. 38% of young Indians are now increasingly focusing on building an emergency corpus, compared to 28% the year before. This shift underscores the drastic change in financial sensibilities brought forth by the pandemic and the consequent desire for greater financial resilience. In fact, approximately 4 out of every 5 surveyed investors maintained a dedicated, separate savings account. Out of the 1,650 individuals studied under the FinOne survey, a staggering majority made their first foray into the stock market in their early twenties. Nearly 2 in every 5 investors pick stock as their preferred choice of investment, followed by mutual funds and then savings bank accounts. While 45% of those surveyed picked stocks as their chosen investment avenue, 20% preferred mutual funds, and 15% wanted to keep their money in a savings bank account.

Gen Z and Millennials prefer stocks and mutual funds; index funds trump over ETFs, say recent reports

<ul class="summary-list"><li>William Reeve is an entrepreneur who's been angel investing for the past 25 years.</li><li>When weighing up investment opportunities, he's looking for founders who'll listen well.</li></ul>This as-told-to essay is based on a transcribed conversation with William Reeve, 52, an angel investor based in North London. Reed is the CEO of the lettings platform <a target="_blank" href="http://Goodlord.co">Goodlord.co</a>, and a non-executive director of the homeware retailer Dunelm. One of the companies he founded, LOVEFiLM, a DVD rental and streaming business, <a target="_blank" href="https://www.businessinsider.com/amazon-lovefilm-2011-1">was acquired by Amazon in 2011</a> and reportedly valued at $312 million at the time. The following has been edited for length and clarity.I've been a fairly active <a target="_blank" class="" href="https://www.businessinsider.com/these-are-the-60-top-angel-investors-for-b2b-startups-2024-6">angel investor</a> for 25 years now.From a young age, I was a computer geek. In 1997, I set up my first business, Fletcher Research, researching the internet for large corporates. I was in the right place at the right time. My company <a target="_blank" href="https://uk.themedialeader.com/forrester-acquires-fletcher-research/">was acquired in 1999</a> for a life-changing amount of money.I didn't have a plan for that money.In the early 2000s, I loaned a university friend some money and from there, began making more investments. I had some connections with people I'd done a graduate program with at <a target="_blank" class="" href="https://www.businessinsider.com/mckinsey-ai-consulting-focus-future-2024-6">McKinsey</a> who had investment opportunities.Roughly four years after my first business was acquired, I cofounded LOVEFiLM, a DVD rental company. People I worked with there went on to run Zoopla, a well-known UK property website, which I invested in.I've made about 60 investments over my lifetime, including repeat investments and crowdsourcing. My ticket size is usually around £20,000, around $25,000. This is relatively small, but I've got a lot of experience that founders look for in <a target="_blank" class="" href="https://www.businessinsider.com/seed-100-best-early-stage-vc-investors-2024-5">investors</a>. I've built up a strategy for fielding opportunities over the years and learned about what makes a good investment.<h2 id="97712f69-8bfa-4a5c-8480-18f6eeaec799">I'm looking for entrepreneurs who I can help, not people who just want the money</h2>I'm generally looking to invest in companies where I have expertise to offer, either because tech is integral to their strategy or I can support their <a target="_blank" class="" href="https://www.businessinsider.com/entrepreneurship-guide-pitch-deck-startup-venture-capitalist-raise-money-2019-3">fundraising</a> and hiring.When I meet a founder, I look for their ability to listen; the best entrepreneurs are usually naturally curious and good listeners. There's nothing more frustrating than offering advice and being ignored. If a founder only wants money and has no intention of talking or listening, I tend to pass.I've reached out to companies I liked in the past, but it's rare. I mostly wait for people to pitch to me.One filtering mechanism I have is that <a target="_blank" class="" href="https://www.businessinsider.com/female-startup-founder-mode-ceo-double-standard-2024-9">founders</a> must contact me through another investor or entrepreneur I know. I'm a well-networked guy; there are hundreds of people I'd happily accept an introduction from. It speeds up the process.I've learned not to invest after a first meeting. I need three touchpoints, such as meetings or emails, to sense whether my relationship with a founder is developing or if they're meeting their promises.I also leverage my network to do due diligence. If I know someone who knows the space better than me, I'll chat with them or ask them to meet potential investees for me.My standard ticket size is around £20,000 or £25,000, but I've invested up to about £100,000 in some businesses over multiple investments. It's stayed at that amount over the years partly out of habit, but also because I want to focus on the entrepreneur and business without getting distracted by trying to "game" the ticket size.The expertise you can offer as an investor is fairly general, such as insights about fundraising strategy or how boards should be structured. But I've also made specific contributions: I found a CTO for one business and have supported several others in securing their main investor. However, I usually make the most impact with companies when I am on their board, which I've done for about a dozen of my investments.<h2 id="57f967e5-d9df-4314-9651-aa8e115dd063">There are good and bad signs in a potential investment</h2>I love companies that have a "MacGuffin," a term Alfred Hitchcock used to describe the hook that draws viewers into a film. I want to see the hook that explains why a business will win in a competitive marketplace.If I'm meeting entrepreneurs, I'll point to a passerby and ask, "Those guys are setting up the same thing as you. Why are you going to win?"The good answers are "MacGuffins." They could already have a deal with the No. 1 player in that space or have patents on amazing technology.A bad signal for me is when I see families working together, like couples or siblings. To me, it means there are probably some non-rational factors at play, like family relationships, that make it hard for people to do what's best for the business.The <a target="_blank" class="" href="https://www.businessinsider.com/adam-neumann-launching-wework-rival-different-business-strategy-2024-10">business model</a> is most often what makes me pass. It's pattern-matching — when I've seen something like it before, and it didn't work, I won't invest. It's annoying for the poor entrepreneur, but I like to apply my experience and knowledge of business.<h2 id="0b415f81-ec62-4072-a532-084b345a9350">My advice is to invest in people you know</h2>Angel and <a target="_blank" class="" href="https://www.businessinsider.com/vcs-are-hedging-their-bets-backing-competing-llms-2024-10">venture investing</a> is a high-risk, high-reward activity. If you're not willing to lose everything you invest, it's not something you should be engaging in. You almost have to assume that investments are written off and the money's gone, and what comes back to you is a windfall.I've seen returns several times the value of what I've invested, which is a really fortunate position to be in, and I still have some significant investments that haven't returned any cash yet, though I think they will.I'd say the sort of people who do <a target="_blank" class="" href="https://www.businessinsider.com/how-to-become-an-angel-investor-in-tech-startups-2022-10">angel investing</a> because their accountant suggests doing it for tax breaks aren't going to do very well. I'd encourage people to think about where their edge is — where do they have some advantage over others as an investor? The obvious option is to back people you know because not everyone knows them.Successful <a target="_blank" class="" href="https://www.businessinsider.com/30-of-the-most-successful-early-stage-investors">angel investors</a> are people that founders see as providing more than just money. Regardless of the company's outcome, they have a positive impact on the businesses and entrepreneurs they invest in.Do you want to share your angel investing story? Email <a target="_blank" href="mailto:ccheong@businessinsider.com">ccheong@businessinsider.com</a>

I'm a seasoned angel investor. Here's what I'm looking for from entrepreneurs — and what makes me turn them down.

<ul class="summary-list"><li>Climate change is increasing the severity of natural disasters — and home insurance prices.</li><li>For those moving to a climate-risk state, there are some steps you can take to protect your home.</li></ul>Finding an affordable home in a red-hot real estate market is already a tremendous feat.And now, in addition to rapidly rising prices, home buyers are increasingly worried about another factor: climate change.According to Zillow, more than 80% of home buyers considered climate risks — including flood, wildfire, and hurricane — when shopping for a house.In particular, climate change complicates the homebuying process by sending <a target="_blank" href="https://www.businessinsider.com/climate-change-homeowners-insurance-premium-costs-crisis-skyrocketing-states-hurricanes-2024-10">home insurance premiums skyrocketing</a>. As storms and other natural disasters become more destructive, home insurance providers are raising rates or pulling out of certain states altogether, according to insurance company Insurify.According to Holden Lewis, a home insurance expert at NerdWallet, climate change is hitting states such as California, Florida, North Carolina, Tennessee, Virginia, Texas, Oklahoma, Kansas, and Nebraska the hardest — and wildly disrupting these states' home insurance markets.If you're looking to purchase a house in these high-risk markets, here's what you need to know about rapidly rising home insurance rates.<h2 id="4ca151ec-b6df-44db-821b-3b925503bc08">How to navigate the insurance landscape when moving</h2>As climate change exacerbates the frequency and severity of natural disasters, homes are at higher risk of damage. Insurance companies in turn are raising prices to cover the higher costs of covering claims and reinsurance, or insurance for insurance companies.According to financial data firm Bankrate, the national average cost of home insurance is $2,285 a year for up to $300,000 of dwelling coverage. But in high climate-risk states such as Nebraska, Florida, and Oklahoma, average annual premiums range from $4,835 to $5,655.It might seem obvious, one step homebuyers can take to avoid surprises is consider home insurance costs early in the homebuying process, Lewis said. As insurance premiums increase, they can materially impact your monthly housing payments and push a home out of your affordability zone.Prospective buyers shopping for homes in a new state are especially prone to insurance sticker shock, according to Lewis. For example, if you're thinking of moving from Ohio to Texas, you might not be aware that the average homeowners insurance rate in cyclone-prone Texas is $3,916 a year — $2,600 more than in Ohio, Lewis pointed out.Still, climate-risk states remain popular. According to <a target="_blank" href="https://www.uhaul.com/Articles/About/U-Haul-Announces-Top-Growth-States-Of-2023-30660/">U-Haul</a>, Texas and Florida received the highest influx of new residents in 2023.Many of these newcomers might not have done their homework on the home insurance market before moving to the state, according to Stephanie L., homeowner and lifelong Florida resident who asked not to use her full last name for privacy reasons.There's a lack of consumer awareness of the financial risk extreme weather brings, in Stephanie's opinion. "If you purchase a beautiful home on a river, you have to understand that with the way storms come in, you could be at risk," Stephanie told Business Insider in an interview.Even within climate-risk states, you can minimize your home's exposure to extreme weather and bring down insurance premiums by researching the local neighborhood.When Stephanie bought her house, she picked a location in the Jacksonville metropolitan area, which has less exposure to hurricane risk than other areas of the Sunshine state."We definitely looked for high and dry, not in a flood zone, and not in a hurricane evacuation zone," Stephanie said.Indeed, Jacksonville home insurance premiums are significantly lower than Florida's state average of $5,527, with homeowners paying an average of $2,705 a year for insurance according to Bankrate.Next, when it comes by a natural disaster, you want to ensure that the insurance policy can fully cover rebuilding costs. Many policies offer dwelling coverage limits in line with the market value of the house, but that's not always sufficient coverage, according to Lewis."The market value of the house the day before a fire or storm might be less than the actual cost to rebuild it to current building codes," Lewis said.For prospective homebuyers, Lewis recommends clarifying the dwelling coverage limit with the insurance agent and shopping around for available policies.Also important to note is that flood coverage often isn't included in standard homeowners insurance policies. This is an important consideration if you're looking to buy a house in an area prone to hurricanes."If water is rising, say from a river, or storm surge, then a standard homeowners policy will not cover that damage," Lewis said.Stephanie purchased flood insurance in addition to her regular homeowners insurance when she purchased a home."I also have a separate flood policy even though I'm not in a floodplain," she said. "When you're not in a flood zone, flood insurance is pretty affordable."Although Stephanie isn't at high risk for flooding, she still wants to be prepared for the worst. It's not a bad idea to go the extra mile and purchase extra insurance when it comes to buying a home in Florida, even if you're not directly in a flood zone.In addition to hurricane-prone Gulf Coast states, regions like western North Carolina, eastern Tennessee, and southern Virginia are flooding hotspots, according to Lewis.Lastly, homeowners also should consider how inflation will drive up home insurance costs, especially as concerns over inflation loom high in today's economy. An inflationary environment will increase the cost of building materials and construction, Lewis pointed out.As a result, it may be a good idea to review your coverage every year or two to evaluate the status of your coverage, Lewis said."Talk to the agent, maybe even talk to a general contractor just to find out, 'Hey, am I still covered? Do I still have enough coverage to pay to rebuild this home?'" Lewis suggested.For those considering buying a home in a state with high levels of climate risk, taking these precautions during the homebuying process can help you protect your investment.

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