Over the last few weeks, the roller coaster of stock market volatility has been on full display, with markets in the U.S. and around the world bouncing around and the Dow dropping 345 points on Tuesday as tech stocks got crushed again. What’s more, respected economist Steen Jakobsen from Saxo Bank is warning the market could see as much as a 30 percent correction in coming months, since consumer spending is “maxed out,” making alternative investments like real estate more attractive than ever as investors choose stability and income over gambling on market whims.
“Stock markets could see a hefty fall in the coming months due to a slew of trends that point to a downturn in the global economy”, Jakobsen told CNBC in an interview this week. “he added that in a scenario of a potential sudden economic recession, he sees a possible market correction of between 25 and 30 percent”.
DJIA Drops 345 Points
The Dow dropped 345 points Tuesday as large tech was hit hard, amounting to a decline of more than 1.4 percent and effectively erasing the 244-point “gain” it experienced earlier in the day. This continued the ongoing trend of stock market volatility and uncertainty that has been accelerated in recent weeks after it suddenly dropped 10.8 percent in early February – which was the largest one-day decline in history.
The Nasdaq also plunged nearly three percent Tuesday, which also wiped out recent “gains,” leaving the Nasdaq up only 1.5 percent for the year. Add to this the fact that Treasury yields on government bonds have slipped to just 2.77 percent and it’s easy to see why investors – especially those concerned about having enough retirement income – are starting to seek out alternative investments like real estate.
What’s more, investors probably should not fall for the idea that GDP will rise to five percent or higher anytime soon. So far, during the first quarter of 2018 the U.S. GDP is at significantly less than two percent, which is right around where it has been hovering since the global financial crisis. One reason for the slower than anticipated growth is the growing trade tensions between the U.S. and major partners, but reduced infrastructure spending and tax system reforms have also had a negative effect.
If all this uncertainty has you rethinking retirement, you certainly aren’t alone. More investors than ever are seeking out alternative investments to traditional stocks, bonds and mutual funds in an effort to combat the effects of inflation and provide ongoing retirement income that will ultimately help maintain a high quality of life after leaving the workforce.
Real Estate Investment Can Provide Retirement Income
Despite ongoing stock market volatility and uncertainty, most investors still have money in the stock market, tied up in conventional investments. Also, many still have no idea that investing in real estate could actually provide much better return on investment over time, along with stable ongoing retirement income… Not to mention peace of mind knowing that your investments are safe and not subject to global and/or national influences that are beyond your control!
The good news is that we have a solution: Vacation home investment offers a unique opportunity to get ongoing rental income to the tune of 8-14 percent ROI, and the investment property can be purchased with funds in your IRA account to provide tax-deferred growth, as well as a hedge against inflation.
“Rental properties offer the rare opportunity to generate extra cash for post-work life”, wrote Bankrate. “Investors should focus on properties that generate positive cash flow of at least 6% (above costs)”.
One major key to finding turnkey vacation home rentals that will provide excellent return on investment is similar to almost any other type of real estate investment and that is a great location! Look for turnkey rental properties that are designed to provide a stress-free ownership experience and that already have an experienced property management team in place to handle maintenance and reservations.
This will not only ensure that your investment property gets great guest reviews and provides a great experience for all visitors, but it also opens up the opportunity to buy property anywhere in the world, since you won’t have to be available to handle the day-to-day demands of running a successful vacation home rental property.
Do you have questions real estate investing? Post them in the comments!
Read Turnkey Real Estate Offers Stability as Stock Market Correction Looms to learn more about why alternative investments like real estate should be part of every investment portfolio.