Some of today’s most respected analysts have spoken out recently with new warnings about a looming stock market crash that could be “worse than the Great Depression,” according to Newsweek and CNBC, citing growing debt, a massive liquidity crisis, social unrest, computerized trading strategies and a trillion-dollar shift to passive alternative investments like real estate. Read on to learn more about how to protect your financial portfolio from ongoing stock market volatility and how to spot the world’s best areas for real estate investment.
The Next Stock Market Crisis is Imminent
Although analysts can’t tell us exactly when the next stock market crash will happen, the one thing everyone seems to agree on is that it will happen… And when it does, the effects will be massive. So far this month, two of the world’s most respected financial analysts have already warned investors, with Marko Kolanovic (J.P. Morgan’s current top quant) speaking out about the coming “flash crashes and social unrest not seen in 50 years,” and Goldman Sachs gurus predicting that this year’s U.S. fiscal outlook would be “not good,” citing a decade of increasing household debt and skyrocketing student loans.
“In 2018, a $247 trillion global debt will be the greatest cause of the next cataclysmic financial crash”, Goldman Sachs experts predicted. “Additionally, low wages and the U.S. national debt’s steady rise are expected to drag down the economy”.
Kolanovic envisions sudden, severe stock sell-offs sparked by lightning-fast trading machines, coupled with unforeseen attempts by central banks to shore up asset prices and ongoing social unrest in the U.S., which its citizens haven’t experienced for more than 50 years.
“The major market trends that occurred after the 2008 crisis exacerbate selling during moments of panic”, Kolanovic said in a recently released report. “The massive shift from active to passive managed investments – an estimated $2 trillion has moved that way in the past decade – has removed a pool of buyers who can swoop in if valuations tumble”.
Why Should You Invest in Real Estate?
As the likelihood of ongoing stock market volatility increases, it becomes more important than ever to ensure that your financial portfolio is properly diversified, which includes proven, secure, income producing alternative investments like real estate. By the way, this includes funds in your IRA, 401k or other retirement plan, in addition to any other investment accounts you may have. Many investors don’t realize they can transfer funds from virtually any retirement account to a Self Directed IRA and use the money to buy an income producing investment property, such as a vacation home or other rental.
In addition to providing a way to protect your money from stock market volatility, investing in real estate also provides a hedge against inflation, because property values and rents typically increase as much or more than inflation, while other types of investments tend to flatten out or even fall behind. When you buy real estate with funds in your IRA account, you also get to enjoy the benefits of earning proven, predictable tax-deferred retirement income… If you know where to buy!
Location is Key
Finally, don’t be limited to finding investment properties that are located in your hometown – in fact, the best income producing real estate investments are likely to be in major cities, college towns, growing areas and popular vacation destinations. Look for a dynamic real estate market that will never depreciate, yet still offers plenty of room for upside potential and hasn’t yet priced out average buyers. Once you’ve settled on an ideal location, find a local real estate investment advisor you can trust and look for professionally managed turnkey rental properties that pay proven, ongoing return on investment in a hassle-free format that won’t infringe on your peace of mind.
Do you have questions about real estate investing? Share them in the comments!
Read Income Producing Real Estate Investment Outperforms Stocks and Bonds to learn more about why investment properties offer the ideal refuge from ongoing stock market volatility.