Anyone who’s watched the stock market lately knows that the only thing you can expect is the unexpected. Market volatility scares off a lot of people–and it also encourages investors looking for a quick buck to try some daring buy-ins. But what about you and your retirement portfolio? Doesn’t it make sense for people to develop diversified portfolios that includes Real Estate IRAs so that they’re not constantly checking the stock tickers and the news on Wall Street?
If you found yourself asking those very questions, then you have some good instincts: the truth is, Real Estate IRAs are indeed a great way to move money out of the stock market without having to worry that your retirement is doomed. Sure, the real estate market is subject to its own volatility…but it’s when you’re diversified in a number of different assets including real estate that you really start to feel secure about your financial future.
As a retirement investor, your goal should be to create a stable enough portfolio that even when there are bad days on Wall Street, you simply sip your morning coffee and relax, knowing and trusting that your nest egg will still grow in the long run. Let’s explore how Real Estate IRAs can help you get there.
Real Estate IRAs are a Great Source of Protection
One of the most important characteristics of Real Estate IRAs that makes them so attractive to apprehensive investors is that they afford you certain protections that you wouldn’t have if you simply invested in real estate on your own.
Real estate typically requires that people use leverage in order to make a purchase. Leverage is simply a term that refers to credit, or loans, in many cases. In a Self-Directed IRA, you can still use leverage, but with an added bonus: added liability protection. Having additional protection from creditors is crucial to anyone who wants to minimize the risks they take when investing in real estate. Sure, there are some limitations to Real Estate IRAs–for instance, you can’t live in the real estate through which you invest in your IRA–but having this additional layer of protection is particularly attractive for someone who wants to build long-term wealth.
Diversifying Out of a Volatile Stock Market
We aren’t telling anyone to completely abandon the stock market. Clearly there is plenty of long-term wealth to be built in the stock market, as long as you have that long-term mindset. But diversification is a different matter. As we saw recently, having all of your money in the stock market can be just as risky as having no money in the stock market, in some cases. If you really want to protect yourself, you should seek alternative investment areas through which to build wealth. When the stock market goes down, undisciplined investors take their money out. Diversifying is a sure way to help you feel disciplined.
Real estate is one of the most common ways for investors to diversify out of the stock market. Not only does real estate provide income potential through renting, but it’s an entirely different industry from the stock market altogether. This helps investors cast a “wide net.” And if you have experience in using leverage to invest in real estate, you can use your skills to help build your nest egg as well.
The short answer: yes, Real Estate IRAs can be sound investments in times of market volatility–but the truth is, sound investing strategies aren’t going anywhere soon. Markets, too, will have periods of booms and busts. The key is a long-term mindset. If you’re interested in adding a layer of protection to a well-diversified portfolio, you can learn more by contacting us at 1-866-7500-IRA(472) or continuing to browse AmericanIRA.com.