Do You Have Any Advice in Light of
the Stock Market Meltdown?
To say there is concern about the economy and the Stock Market Meltdown would be a major understatement, like saying that World War II was a small European conflict barely fit for reporting in the history books.
$2.8 trillion dollars in value has evaporated in three weeks! That’s TRILLION with a Capital T.
I don’t see how any one who is watching what is going on both nationally and globally could not be concerned about fiscal security after watching the stock market meltdown.
Yesterday, our local paper, the Orange County Register asked if I had any thoughts on this.
As it turns out, I do.
Regarding retirement money and the stock market meltdown, I have had clients coming to me the last few days asking if there is a way to invest money in real estate using their retirement accounts, and I have told several that there may be. In some cases, 401Ks, particularly from previous employers, can be converted to self-directed IRAs allowing them to control the direction of investment. Real estate is certainly one avenue many of them take, but it is not the only one allowed them with self-directed IRAs. I think in this time of uncertainty, many people believe that there is more solidity in real estate because there is actually something of substance as opposed to the stock market where you can’t actually get your hands on what you own.
For people who are simply looking at their standard stock portfolios and wondering what they might do instead, we continue to hear that the rental market is strong. If a person is considering investment property, many properties in Orange County now cash flow as rentals that didn’t in the past several years both because prices and interest rates are down significantly. While I don’t recommend buying and holding a property that is losing money each month in hope of gaining equity later, I do believe that finding a property that cash flows can be a good investment with the hope that the property will grow in equity some number of years from now.
Is real estate the perfect solution to the stock market meltdown? Are there any guarantees that prices won’t fall further? There certainly aren’t! However, it may provide more stability than a stock market that at times seems to be in free fall.
What do you think? Are you better off taking your chances in the stock market? Real estate? Gold? Do you have some other ideas?
If you would like to consider moving your retirement to a self-directed IRA, please contact me at 714-319-9751, and I will provide you with the information for some companies that can help you.