Stock market volatility over the past few years has been spooking many investors out of investing altogether. Many retirees have simply been unwilling to accept the sharp ups and downs that seemed to have become commonplace for investments in stocks and mutual funds. As an alternative, they have shifted much of their retirement savings into “ultra safe” asset classes such as certificates of deposit, money market mutual funds and even cash.
Unfortunately, these types of investments are currently generating yields that are at or near their all-time lows. Even corporate debt, which had previously been a reliable source of investment income at a reasonable level of risk, is paying interest at rates that are significantly lower than their historic averages.
To escape stock market volatility when it comes to your retirement nest egg, you might want to consider a self directed IRA. With a self-directed IRA it’s easier to put your money into investment types that are generally not offered by IRA custodians. The specialists at Quest Trust Company are trained to provide you with the information you need to explore what options are best for your situation. Instead of limiting your choices, you may want to consider what a self-directed IRA can do for you.
For example, funds from a self-directed IRA can be invested into virtually any type of real estate (commercial, residential and even farm land), making loans, buying businesses, tax liens and making private equity investments.
The perception among many investors is that real estate is simply too volatile to be considered as a good alternative to investing in the stock market, but that’s not always the case. While some local real estate markets around the country have experienced have experienced significant declines from their peak levels, in many cases property values are still well above where they were ten or fifteen years ago. (Compare this to most broad stock market indices, which have recently been trading at levels that are very close to where they were in the year 2000.)
When you take into account the cash flow that likely could have been realized from holding and renting out a piece of commercial or residential real estate over that same ten to fifteen year period, it’s clear that this type of investment can provide a very profitable alternative to the volatility and flat returns that many investors have experienced over the past decade in the stock market.
Note that a self-directed IRA is actually no different from a legal perspective than a traditional IRA or a Roth IRA. A self-directed IRA is the same as those more familiar types of IRAs, except that the custodian of a self-directed IRA permits the account holder to make the full range of investments that are permitted under the applicable IRS regulations.
If you’re interested in leaving behind some of the recent stock market volatility, look into a self-directed IRA. Contact Quest Trust Company at 800-320-5950 today to set up a free consultation and allow their specialists to give you choices that will offer you peace of mind.