Why Nervous Investors Can Benefit from Real Estate IRAsPosted on October 20, 2015 by
When stock markets are volatile, investors (rightly) get nervous. After all, many people have most of their wealth in the stock market. If the stock market goes down, then they see their wealth shrinking…and for people close to retirement, this is a scary prospect indeed. But it doesn’t have to be this way. With Real Estate IRAs, many people learn that retirement income doesn’t have to depend on the quality of the Dow Jones Industrial Average. Instead, retirement income can depend on your strength as an investor, and the wisdom it takes to know what true diversification really is.
And just what is that “diversification” we’re talking about? Some people will tell you that investing with diversification means having the right mix of stocks and bonds, of having stocks split up into small cap, medium cap, and large cap equities. But all that really means is that you’re invested in two different investment categories, all the while ignoring all of the very real possibilities for retirement income that are out there.
If you’re sick of feeling nervous every time that stock ticker heads into the red, then it’s time to broaden your horizons as a wise retirement investor and look into what diversification really means.
Why Real Estate IRAs Help You Break Out of the Market
One caveat: most wise investors don’t suggest pulling out of the stock market. A few days of volatility are not enough justification for completely overhauling your portfolio, especially if the fundamentals of your portfolio are particularly healthy.
But rounding out your portfolio with investment types that differ from the stock market? That’s a little different. That’s diversification. When you consider that many retirement so-called “experts” will tell you simply to diversify your stock holdings, you should realize that something is wrong. A truly diversified portfolio has holdings in different types of stocks, sure, but also different types of industries. And the real estate market is one such category.
Sure, just about any sector is tied to the strength of the economy as a whole. But diversification means that you don’t stand to lose substantial chunks of wealth every time Wall Street takes a dip.
Adding Security, Minimizing Liabilities
For many investors, a phrase like “real estate” itself is intimidating. They think that real estate is best left to experts with experience, to tycoons with lots of money to toss around. Borrowing money to buy real estate means going into debt, and for many people, debt means less security.
The good news about Real Estate IRAs is that you can have some additional protection by utilizing your IRA. For example, a creditor can’t come at you for all you’re worth simply because of an investment you made through your IRA. It still means there’s risk out there–as there is in any investment–but it helps you separate your personal life from the retirement account, which is great for nervous investors who don’t like the idea of having debt hanging over their heads. If you’ve ever wanted to take more risks but wanted more protection on your leverage, an IRA might be right for you and your retirement strategy.
There are certain restrictions to investing in real estate through an IRA, as well, such as not living in the real estate in which you invest. But these restrictions are, for many people, well worth the advantages that are afforded through investing in a Real Estate IRA. To learn more, be sure to call us at 1-866-7500-IRA(472) or simply continue browsing our site here at AmericanIRA.com.