Real Estate IRAs Provide Real Diversification Against Struggling Stock Market

It has been a rough few months for most investors. But, owners of Real Estate IRAs have been doing pretty well.

The last week of March the Dow Jones Industrial Average plummeted 1400 points to reach a low for the year. The Dow fell 5.7 points and the S&P 500 fell 5.9 percent – the worst week for stocks in two years. The Nasdaq fell 6.5 percent that week. The S&P 500 is now 0.68 percent underwater for the year to date. The Dow is now 11.2 percent off its high.

Sure, that is not the end of the world – it is also up by more than 12 percent over the previous 12 months. Stocks have been exceptionally volatile lately. The U.S. stock market is also trading at over 27 times earnings which have been looking favorable. There is ample good news already figured into the stock market. One big earnings miss, or a disappointing jobs report could bring the whole thing down by a significant amount.

“The market has been priced for perfection … and that leaves the market vulnerable to surprises. In this case, it’s trade,” according to Baird analyst Bruce Bittles.

Stock Vulnerability Is Global

U.S. markets were not the only losers. Stocks lost money around the world – this time on fears of a potential trade war between the U.S. and China, sparked by talk of tariffs in Washington. China helped send shares plummeting by slapping retaliatory tariffs on more than 148 U.S. products, including steel pipes, pork, almonds and California wine.

In the above markets, diversifying into international stocks did not shelter investors from the pain.

Real Estate IRAs Outperforming

The investors who chose to diversify into Real Estate IRAs experienced a better outcome:  U.S. house prices jumped 7.3 percent in January compared to the same times last year, according to data from the Federal Housing Finance Agency. Prices were up more than 10 percent in the Mountain region. Prices had jumped 0.8 percent from December to January – the biggest monthly increase since February of 2017.

Real estate has been delivering a solid annual return – on an unleveraged basis – while still showing much less downside volatility. Over the past 12 months, all regions in the U.S. were up, with the weakest regional market – the West South-Central region (Oklahoma, Arkansas, Texas and Louisiana) increasing by 5.1 percent. Home prices in Montana, Idaho, Wyoming, Nevada, Utah, Colorado, Arizona and New Mexico saw double-digit increases.

The Potential Benefits of Leverage in Real Estate IRAs

Real estate investors are doing much better than even those numbers suggest. First, real estate is commonly leveraged. So, an investor in Colorado with a typical real estate portfolio gain of 10 percent for the gain but holding just 50 percent equity is getting close to 20 percent, minus costs of carry.

Furthermore, he or she is collecting rental income the whole time. In this case, the landlord can collect two rents for the price of one, thanks to leverage.

Leverage increases risks, in a down market, it can make things very dicey for the borrower. At the present, however, most real estate investors have been doing much better than stock market investors, with less stress (assuming good tenants)!

The last few months have been excellent for Real Estate IRA investors. The strategy has been working as intended: Real Estate IRAs provide meaningful diversification to portfolios otherwise heavy with stocks. They are delivering solid price appreciation. They are generating current rental income, so investors get paid to wait. And the income they generate has been steadily increasing. Rents have been rising in nearly 9 out of 10 cities, according to data from RentCafe, helping protect income-oriented investors against inflation.

Own Real Estate IRAs

We suggest nearly every American with significant retirement savings or investable assets consider including real estate, including Real Estate IRAs, in their portfolio.

Holding real estate in a Real Estate IRA, Solo 401(K) or SEP IRA can help shelter increasing income from taxes and generate free cash flow on a tax advantaged basis.

Investing in a Real Estate IRA is very easy: Call American IRA, LLC today at 866-7500-IRA (472). You may also download our exclusive guide to Real Estate IRA investing here.

We look forward to hearing from you.

Baby Boomer, Gen X Retirement Saving Inadequate, Study Says

When it comes to retirement saving, the Baby Boomer generation is in trouble.

Despite many of them now entering retirement, the majority of those born between 1946 and 1964 report having less than $250,000 in retirement assets. Only about 1 in 3 Boomers has that much saved up – leading to a retirement income shortfall of between $3,864 and $12,072, according to research from the Insured Retirement Institute.

And things are not looking too great for Gen Xers, either. According to the Insured Retirement Institute’s (IRI) fourth biennial report on Generation X, about 4 in 10 members of this generational cohort do not have money saved for their retirement. Despite an overall improvement in the economy, this represents a deterioration of about 5 percentage points from two years ago.

Of those with retirement savings, about 6 in 10 have saved less than $250,000. On the other hand, the percentage of those who have saved at least $250,000 or more has nearly doubled over the same time frame, rising from 12 percent in early 2016 to 23 percent in 2018.

According to the IRI, about 60 percent of Generation X respondents report being generally confident they will have enough money saved for retirement. Their top three economic concerns are changes in Social Security (66 percent), higher than expected health care expenses (64 percent) in retirement and running out of money (59 percent).

Ultimately, people across the generations need to get serious about putting money away.

Use “Catch-Up Contribution Limits”

The Baby Boomers and the oldest of the Generation Xers can both take advantage of “catch-up contribution” limits, available to those ages 50 and older. Congress anticipated the need for older Americans to sock more money away as they enter their peak earning years and their children have reached adulthood.

For Self-Directed IRAs, individuals age 50 and older can put an additional $1,000 away each year in combined Roth IRA and Traditional IRA contributions – over and above the normal $6,500 annual limit. Some limitations apply for those at higher income levels.

Older Self-Directed 401(k) beneficiaries can also increase salary deferral contributions. As of 2018, those ages 50 and older can contribute an additional $6,000 per year to employer-sponsored Self-Directed 401(k) plans, on top of the generally applicable $18,500 contributions, for a total potential employee contribution of $24,500 per year.

Similar provisions also apply to 403(b) plans, the federal Thrift Savings Plan and many Section 457 deferred compensation plans for public employees. They also apply to Self-Directed 401(k)s and small business Self-Directed 401(k)s.

Those turning 50 and older this year should consider taking full advantage of these more generous tax-advantaged compensation limits.

Working longer

Many Americans will have little choice but to stay in the work force longer and put off retirement. This means more years of earning an income, and more years of potential retirement contributions and compounding within retirement accounts. It also means higher monthly Social Security benefits, if you can put off collecting Social Security until you reach full retirement age.

Staying in the work force also means you do not have to stretch your retirement income over as many years. With today’s advances in health care and nutrition, it has grown commonplace for Americans to live into their late 80s and 90s. Taking income out of your portfolio for 10 years rather than 20 years can make a big difference in the sustainability of your retirement income.

For more information on getting started with Self-Directed IRA investing, call American IRA today at 866-7500-IRA (472).

Survey: Most Americans Have No “Bear Market” Retirement Plan In Place

Federal banking regulators routinely force banks to “stress test” their portfolios, modelling what would happen under various troublesome economic scenarios. They do this so that banks have a chance to shore up wobbly loan portfolios and liabilities before the crisis arises.

Have you done the same with your retirement plan?

A new survey shows that nearly half of Americans have not.

The latest Country Financial Security Index shows that almost half of all Americans could not withstand a sudden 6,000 point hit to the Dow Jones Industrial average, which would slash much of their retirement portfolio’s power to generate income in retirement.

A decline of that magnitude would constitute roughly a 25 percent drop from current levels (depending, of course, on when you read this!)

It has not even been a decade since we have seen a decline at that level – it last occurred in 2009, during the worst of the Great Recession and the mortgage crisis, which spilled over into stocks and real estate – though it was a boon for gold investors and for those willing to pick up real estate and other assets at bargain basement prices.

“Our motivation in asking the question was to get investors’ attention,” says Doyle Williams, executive Vice President at Country Financial, the Bloomington, Ill. insurance and financial services company. “We want them to think about a drop of this size ahead of time, to get them to think about what they would do in the moment,” he told editors of USAToday, ahead of the survey’s publication.

Other findings:

Only about half of Americans – 52 percent – told surveyors that they were “financially prepared” for a 25 percent decline in the stock market as of February 2018. However, only 28 percent reported having any kind of financial safety plan in place. 44 percent reported having no such plan.

What would such a plan look like?

Here are some suggestions:

1.)  Maintain a significant emergency fund. Ideally, you should have 3 to 6 months of financial reserves to see you through any manner of emergencies. For many people, this may not be an easy practice: A 2017 study, also by Country Financial, found that about half of Americans – 49 percent – do not have enough savings on hand to cover three months of expenses if they lost their jobs or other primary sources of income.

If you fall into the above category, chances are your emergency fund can use some shoring up. Checking and savings accounts, money market funds and cash value in permanent life insurance policies are all good homes for your emergency fund savings.

2.)  Reduce debt. Your emergency fund will probably last a lot longer if you do not have any payments.

3.)  Fully fund your IRA or Roth IRA (including Self-Directed IRAs). Your IRA savings can pull double duty: Contributions can grow tax-deferred or – in the case of Roth IRAs – tax free as long as the money remains in the account, into retirement. Yes, there is a 10 percent penalty on early distributions under normal circumstances. But IRAs also have a number of hardship provisions that waive this penalty if the withdrawal is made under qualifying circumstances.

These circumstances include:

  • Disability
  • Death
  • Avoidance of foreclosure or eviction
  • Paying for qualifying medical expenses exceeding 10 percent of your adjusted gross income
  • Paying for health insurance premiums.

Do not rely on 401(k) assets for emergency savings. Many companies do not allow for in-service withdrawals, and emergency hardship withdrawal limits are generally much more stringent. However, if your plan allows for loans against your 401(k) balances, this could help in a pinch. Remember you must pay the loan back to the plan.

4.)  Diversify your portfolio. If you are overexposed to stocks – so much that the prospect of a 25 percent or even a 50 percent decline scares you, it is time to diversify. Move money into other asset classes, such as bonds, real estate, precious metals, and even further afield. A Self-Directed IRA can be an excellent vehicle for diversifying your retirement portfolio while still retaining the possibility for significant long-term gains.

 For more information on using a Self-Directed IRA to increase diversification and potentially reduce your overall risk exposure in the event of a big stock market decline, call American IRA, LLC today at 866-7500-IRA (472).

 

 

 

Self-Directed IRA for Independent Minded Investors

Lots of people want or need a financial advisor to work with them for every financial decision. And that is ok. There is a time and place for that, and there are great advisors and brokers out there who do a lot of good for them.  And then there are the kind of investors who use a Self-Directed IRA.  These investors prefer to diversify or may just want all their retirement funds in alternative assets.

Self-Directed IRA Basics

Structurally and legally, a Self-Directed IRA is just a subset of Traditional IRAs or Roth IRAs. The difference is that the owner of a Self-Directed IRA has chosen to sidestep the Wall Street distribution system – the vast network of brokers and advisors that channel money into the stock, bond and mutual fund markets – and invest money directly, usually in one or more alternative asset classes or in direct placement opportunities that bypass Wall Street.

Assets Commonly Held in IRAs

Conventional (Traditional or Roth) IRAs Self-Directed (Traditional or Roth) IRAs
Mutual funds Mutual funds
Publicly traded stocks Publicly and non-publicly traded stocks
Publicly-traded bonds Publicly-traded and privately-placed bonds
Annuities Annuities
CDs and money markets CDs and money markets
Publicly Traded REITs Publicly and privately-traded REITs, direct ownership of rental real estate
Master limited partnerships Any partnerships, MLPs or privately held
Publicly traded private equity funds Private equity funds and direct private equity placement
Hedge funds and funds of funds (accredited investors only)
Oil and gas investments
Fix and flip real estate
Tax liens and certificates
Private mortgage lending
Hard money lending/bridge loans
Asset-backed lending
Gold and precious metals
Closely-held C corporations
Partnerships and LLCs
Farms and ranches
Accounts receivable factoring
Commercial lending
And much more…

As you can see, the Self-Directed IRA is a tremendously flexible vehicle. If you are willing and able to look beyond the relatively narrow set of asset classes that Wall Street brokers have in their inventory, you can achieve a much more diverse portfolio than you can limiting yourself to paper assets.

In many cases, you can gain exposure to better performing investments, simply by virtue of the ‘go anywhere’ benefit of the Self-Directed IRA strategy. You may be able to reduce risk at the same time, either by investing in very safe and secure investments, or adding investments with a very low correlation to the S&P 500 or other paper assets you may hold elsewhere in your portfolio.

Custodians and Administrators

IRS rules do not allow investors to hold IRA assets directly. Instead, all assets in an IRA have to be held in trust for you, in the IRA’s name, by a custodian, trustee, or administrator such as American IRA, LLC.

The process is simple:

  • Open an account with American IRA, LLC
  • Transfer funds to the account
  • Provide written instructions to American IRA, detailing what assets you want us to buy and sell on behalf of your IRA; what expenses you want us to pay with IRA funds, and what you want us to distribute to you.

Prohibited Transactions.

 You can invest in almost anything with a Self-Directed IRA. But you have to avoid just a few types of investments, and you cannot transact directly with certain family members.

For example: You cannot use IRA money to invest in life insurance, collectibles, alcoholic beverages, jewelry and gemstones, gold and precious metals of uncertain provenance or insufficient purity and mint quality (call us for specifics).

Additionally, you cannot use IRA money to buy or borrow from or lend or sell to yourself, your spouse, any of your lineal descendants, ascendants, or any entities they control. That means you cannot buy a property and let your son or stepdaughter handle the property management for a fee, and you cannot lend them money from your IRA to buy a home.

You also cannot transact with an advisor who provides advice about your IRA investments. Any of these would pose a conflict of interest and potentially be disallowed by the IRS.

Ready to learn more? Download one of our investment guides at www.AmericanIRA.com, or call us today at 866-7500-IRA (472).

 

 

 

Return of Stock Market Volatility Underscores Need For Self-Directed IRAs and Diversification

February 2018 has been a stressful month for stock investors. Volatility is back with a vengeance: The Dow Jones Industrial Average components – what we used to call “blue-chip stocks” for their safety and staidness, took some big stumbles early in the month. This happens every once in a while, – but this time the declines triggered some program trading, computers were programmed to dump stocks as soon as the Dow, S&P 500 or some other signal dropped below a given level. The selling forces stocks lower, triggering even more program trade selling, and so a vicious cycle takes over.

And that, despite an economy that is prospering by most metrics, is how the Dow recorded a record 1,175 point loss on February 8th.

One might call it a reaction to a bull market that stockholders have appreciated over the last year. While we have seen a recovery since then (and stocks are setting new highs), the recent volatility has hopefully reinstated a healthy appreciation for risk: It is pretty scary to see 5 to 10 percent of your retirement nest egg disappear in a couple of days. Volatility can hurt.

Fortunately, the vast majority of our clients did not need to bat an eyelash. Indeed, some of them may even benefit from the volatility, as investors dump stocks looking for safer assets.

Self-Directed Investing means you do not have to worry about what the stock market does every day. Many of our clients have much of their long-term money invested in far more sound assets than stocks such as:

  • Rental properties
  • Commercial real estate
  • Tax liens and certificates
  • Gold and precious metals
  • Closely-held companies, LLCs and partnerships
  • Farms and ranches
  • Land
  • Private equity
  • Venture capital
  • Private lending
  • Mortgage lending
  • Equipment leasing

… and more.

While the value of each of these investments fluctuate, none of them are tied to the day-to-day fickleness of the stock market. Our clients have the luxury of being indifferent to most of the noise on Squawk Box and Jim Cramer’s Mad Money.

Most mature investors regard shows like these as a waste of time. The smart money is always way ahead of what the average consumer sees on TV.

As television and radio personality Dave Ramsey is fond of saying, “investing is a crockpot, not a microwave.” That is the approach taken by most Self-Directed IRA owners, who define holding periods in terms of years and decades, not hours and days. The longer your holding period, and the longer your investment time horizon, the less you have to worry about short-term volatility.

For alternative asset investors, there is no daily price index to track – and certainly no intra-day prices to obsess over. The focus is on the intrinsic value of the investment, and not on the opinions of millions of strangers – most of whom are not very smart anyway.

The lack of intraday pricing, and an overall more deliberate approach to investing and valuation, makes it much easier to avoid falling into the many traps of stock market speculation such as:

  • Focusing on the short-term
  • Panic selling on an impulse
  • Program trading causing you to sell when you should be buying
  • Thinking you are diversified when all your assets tend to move together

For many of our investors, the lack of correlation with the fickle stock market is a source of comfort. They derive piece of mind, knowing however fearful the talking heads on TV are behaving (generally at the wrong times), they do not have to participate in any correction or bear market.

Diversification is a fundamental principal of sound investing. Most individual investors do not do nearly enough of it, and find themselves over-exposed to a volatile stock market at the wrong time.  Self-Directed IRA strategies help you diversify, providing a much-needed hedge against stock market volatility – while still exposing you to opportunities for long-term growth and income.

If you want to do a thorough portfolio review, and find out how you can benefit from implementing Self-Directed IRA strategies in your own retirement investing, call us today at 866-7500-IRA(472).

Private Equity In Your Self-Directed IRA

Own tomorrow’s Dow components today! Or we hope, anyway. But you did not have to invest with Steve Jobs while he was still running Apple out of a garage in the 1970s to do well with private equity or private placements in a Self-Directed IRA.

Just invest in solid, well-managed companies with good accounting and controls, who have a viable business that provides a good value and you can do just fine – and even get better returns over the long run, in many cases by taking advantage of the tax benefits of a Self-Directed IRA.

What is private equity?

When a small company wants to raise capital, it can borrow the money, or it can sell off a piece of itself to investors, who are then entitled to a share of all future dividends the company issues. If the company is publicly traded, it can sell shares over the stock market. But if the company is not publicly traded, it will seek out investors anywhere it can, and negotiate a share price privately.

Many companies do not want to go through the time and expense of issuing a publicly-traded security. Just maintaining a listing on boards like Nasdaq or the NYSE can cost tens of thousands of dollars per year. Unless they are getting major investment bank support to help them place their shares, it is just not worth it to these smaller companies.

Many smaller companies with no regular earnings cannot get traditional lender financing, either. Most traditional lenders just are not equipped to serve this market, as borrowers typically do not meet the lending criteria for the banks’ backers. They do not have the regular earnings to support income-based underwriting, and they may not have real estate or other kinds of readily marketable collateral that most banks rely on to justify a loan.

But Self-Directed IRA owners are not limited by these criteria. Moreover, Self-Directed IRA owners also frequently have the long time horizons that companies seeking investment need. For example, if you lend to or invest in a real estate developer, it may be years from the time you provide the financing to the time the real estate developer has a property completely built and sold off so that it has some cash to pay lenders and investors with!

Meanwhile, private equity seekers have to sweeten the deal, to compensate the Real Estate IRA investor for the cost of tying up their money for a long time. That usually means better terms, and better long-run expected returns. That is, private equity seekers (and private debt seekers as well) have to discount their offerings to attract investors.

Qualifying for Private Equity Placements for your Self-Directed IRA

Not just anybody can be a private equity investor and be eligible for direct placements. In order to invest in a direct placement of private equity, you must meet the definition of an accredited investor, according to Rule 105(a) of the SEC’s Regulation D.

Specifically, you must have a net worth of at least $1 million (not including your primary residence), OR;

You must have an income of at least $200,000 in the last two years if single OR;

Have an income of at least $300,000 in the last two years if married.

Reputable brokers or sellers will have you submit proof of your status as an accredited investor before selling you the shares or bonds, if it is a private debt placement.

Because of the substantial returns available in private equity (the potential is virtually unlimited), and the long time horizons involved, private equity placements can make excellent candidates for Self-Directed IRA investment.

Before you invest, though, understand that these investments, like many popular Self-Directed IRA assets, are frequently not registered securities, and are exempt from a number of SEC regulations and reporting requirements.

They also tend to be very early stage companies, subject to substantial economic risks. They may have unproven products, service offerings, inexperienced management teams, difficulty securing follow-on funding, and they could even be fraudsters. It is, therefore important to engage in a thorough due diligence process before you invest in any private placement offering within a Self-Directed IRA.

What the Tax Cuts and Jobs Act Means for Self-Directed IRA Investors

The passage of the Tax Cuts and Jobs Act – the new, sweeping tax reform bill just signed into law by President Trump – means that those of you who contributed to Traditional IRAs over Roth IRAs in high-tax years may have made a very good bet. The new tax law means that income taxes on most middle-income retirees will be much lower than they otherwise would have been, had the tax reform not passed.

Those of you who contributed to Self-Directed Roth IRAs over the years, only to see this year’s tax reform bill bring taxes down, and not up, still have the consolation of tax-free growth on assets you leave in the Roth for at least five years. So you have not lost anything, but Self-Directed Traditional IRA owners may be much better off under the Tax Cuts and Jobs Act.

Here are the highlights of the new tax law as they pertain to Self-Directed IRA investors:

  • The standard deduction is nearly doubled, to $12,000 for singles, $18,000 for heads of households and $24,000 for married couples. However, the $4,050 personal exemption and dependent exemptions are repealed. The number of people who do not itemize their tax returns is likely to substantially increase.

 

  • The Child Tax Credit is increased through 2025. The law increases the maximum child tax credit from $1,000 to $2,000 per qualifying child. The refundable part of the credit is raised, from $1,000 to $1,400. That means taxpayers can qualify for a tax credit of up to $1,400, even if they have no tax liability for the current year.

 

  • The new law retains seven tax brackets, but the tax rate for each bracket except the lowest one is reduced. The old tax brackets were 10%, 15%, 25%, 28%, 33%, 35% and 39.6%. The new brackets are 10%, 12%, 22%, 24%, 32%, 35% and 37%.

 

 

  • The corporate tax rate is lowered from 35% to 21%. The effects of double taxation on C corporations are much reduced.

 

  • The Child Tax Credit is increased to $2,000, $1,400 of it will be refundable. That is, you can get the benefit of it even if you have zero tax liability, or less than $1,400 of tax liability.

 

  • The alternative minimum tax (AMT) threshold is raised from $86,200 to $109,400.

 

  • Alimony is no longer deductible to the payer, but not countable as income to the recipient. This provision begins in 2019, and may have a substantial effect on divorce proceedings.

 

  • Section 529 plans may now be used to pay for K-12 schools. Previously, they could only be used for college/post-secondary expenses. Section 529 plans can also be used for homeschooling costs.

 

  • Businesses with up to $25 million in income may use the cash accounting method. Previously, businesses with $5 million or more in income were required to use the accrual method of accounting.

 

  • The Affordable Care Act penalty for not having qualified health insurance is reduced to zero under the Tax Cuts and Jobs Act.

 

  • Personal income tax preparation fees are no longer deductible.

 

For 2018, Use Self-Directed IRAs to Help Diversify Your Portfolio

2018 was a great year for Self-Directed IRA investors and stock market investors alike. A strong economy and the prospect of corporate tax cuts (made a reality by the newly signed Tax Cuts and Jobs Act of 2017) sent both the stock market and alternative asset classes popular among Self-Directed IRA investors soaring.

That is very nice for those who invest by looking in the rear-view mirror. But most people smart enough to use Self-Directed IRAs and other retirement accounts to diversify their retirement assets know that the bigger the returns in the past, the tougher it may be to find acceptable returns in the future.

Veteran investors know: As asset prices increase, so does risk. And with the S&P 5oo gaining 19.42 percent for 2017 – on top of an 11.96 percent return for 2016 – the bull market in stocks has got to be getting a little creaky.

This does not mean we cannot continue to have good returns for a while: It depends on what happens to corporate earnings and whether they are strong enough to support the recent U.S. stock market returns.

Investors should use Self-Directed IRAs and other self-directed retirement accounts as a vehicle to help diversify their assets going into 2018. While there is no shortage of mutual funds and individual securities you can stuff into a conventional, old-fashioned broker-sold IRA, some assets are only available as retirement assets to those who use Self-Directed IRAs. For example:

Direct ownership of gold, silver and platinum bullion and coins.

Direct ownership of real estate.

Closely-held, private C-corporations. This asset class, especially, got a boost from the Tax Cuts and Jobs Act because corporate tax rates applicable to C corporations were significantly reduced, from 35 percent to 21 percent. Since dividends are not tax-deductible expenses for corporations, the previous tax regime punished owners of C corporations who relied on them for income, as the effects of double taxation were truly pernicious. Dividends from C corporations took a 35 percent haircut before they were even distributed to the owner, who must pay taxes on them either on their current income tax return (outside of retirement accounts) or when they withdraw the money from a traditional IRA, 401(k) or other retirement account.

The Tax Cut and Jobs Act does have the effect, though, of lessening the incentive of income-sensitive investors to direct money into REITs and Business Development Companies. This is because the tax benefit of treating these entities as flow-throughs is reduced by about a third, from a 35 percent tax to a 21 percent tax on their C corporation alternatives. It remains to be seen how this may affect capital flows to REITs and BDCs. We expect the impact to be relatively small, though, as the best reason to invest in REITs and BDCs is because of the investment properties of the real estate and microcap/VC-stage asset classes. Most people do not let the tax tail wag the investment dog, as it were.

At any rate, the case for diversification into real estate, precious metals, tax deeds and certificates, partnerships, LLCs, oil and gas investments and pipelines remains strong. A good economy should support a wide variety of asset classes, though it may force the Fed to continue to boost interest rates, which will tend to hurt existing bond portfolios.