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Betting on the Stock Market? Recent 4.6% Drop Should Be a Red Flag

06 February, 2018

Betting on the Stock Market? Recent 4.6% Drop Should Be a Red Flag

If you still think the stock market is doing great and provides one of the best ways to invest money for ongoing retirement income, it’s officially time for a serious reality check! The most recent rapid decline, which just passed -1,900 points as I write this, only proves what investors have experienced time and time again over the years: The stock market is volatile and is not a reliable way to invest money when you’re looking for stable ongoing investment income – especially for retirement.

“The Down Jones industrials ominous loss of 666 points on Friday [was] the worst point decline since Lehman Brothers collapsed in October 2008”, wrote CBS News. “The 2.5 percent tumble was [also] the worst percentage drop since the Brexit vote in June 2016. And it capped the worst week for stocks since January 2016”. 

Stock Market Downturn 2018 

After the close last Friday, the losses deepened even more, with the DJIA down a total of -729 points in Friday’s after-hours trading. And as I already mentioned, the decline has continued this week in what feels like a jarring sell-off after the post-election uptrend everyone has become used to.

The evidence clearly shows that the stock market is highly unstable and not ideal for providing steady returns and ongoing retirement income that investors can rely on. It’s simply not safe for you to retire on the whim of the market, when one day you might be planning to retire at 65, but the next it suddenly becomes 85, simply because some unexpected event causes stocks to tumble. Thankfully, we have the solution! 

Stock Market Downturn 2018

Also Read: 

Your 401(k) Will Suffer Over the Next 10 Years – Here’s What You Can Do About It 

Should I Invest in Real Estate or Stocks? A Must-Read for Investors

4 Tips to Buy a Vacation Home Investment and Income Producing Property 

Real Estate Investing Offers Stable Alternative to Stocks

Unfortunately, many people still seem to have very short, fickle memories when it comes to investing money the stock market, which has historically proven its volatility over and over, consistently underperforming compared to more secure, stable alternative investments, such as buying real estate in the path of growth.

In fact, if you look at the 10-year period between 2005-2015, the 5-6% average annualized long-term expected return on investment most stock brokers promised actually drops to just 4.6 percent (which many financial firms then round up to 5%), when inflation is factored into the mix. Comparatively, real estate investment is a tangible asset that also gives your portfolio a natural hedge against inflation. Best of all, during the same period of time, buying real estate provided investors with steady income and average returns of 10%, with much lower risk than the stock market. 

Real Estate Investing Offers Stable Alternative to Stocks

What next? Right now is the best time to liquidate and secure a stable retirement income that is not dependent on the whims of the DJIA or S&P 500. Although experts are calling for some type of rebound following the current stock market slide, it’s going to be short-lived. 

“The resulting bounce could be one of the last exit opportunities ahead of what’s likely to be deeper declines as the cost of credit continues to rise”, wrote CBS News.

Historically, the pattern is for the market to have a very short-term rebound over the next week or so, followed by an even larger decline. This is likely going to test the panic low of most investors and will probably exceed it for those who aren’t interested in gambling on their future by staying fully invested in a market that is obviously coming down from a record all-time high.

Do you have questions about the stock market correction? Let us know in the comments!

Read A Stock Market Correction is Coming: Don’t Let Us Say ‘We Told You So’ and see what top analysts are saying about the best ways to invest money for stable retirement income.

Topics: Real Estate Economy Alternative Investments