Although investor euphoria has been high in recent months, experts agree that a stock market correction is coming, and probably will happen sometime in 2018, which means alternative options like turnkey real estate investing are once again getting the attention of smart investors. In fact, if you ask almost any experienced investment advisor right now, he or she will tell you that at least a 10 to 15 percent correction is looming… Although exactly when it will happen – and what will be hit the hardest – is still anyone’s guess.“When investors don’t think they can get into trouble, they usually do”, shared Byron Wien, vice chairman of Blackstone Private Wealth Solutions, in a Jan 14th interview with Investopedia. “The market needs to have some kind of correction. There are some excesses in it. So, I fully expect it to happen”.
In addition, Teal Linde, who serves as editor of last year’s top-performing investment newsletter – the Linde Equity Report – also does not forecast a rising stock market in 2018. Although not suggesting a full-blown bear market is on the horizon, Linde is advising investors look for investments that offer strong growth rates, high gross margins, expanding demand and room for significant price / sales and price / earnings expansion… All of which can be found with smart turnkey real estate investments in high-demand destinations, such as Mexico’s Riviera Maya.
In addition, real estate investing provides an excellent hedge against inflation, which is why buyers are much more likely to see actual 10 percent returns from a smart income producing property than from stocks, bonds and mutual funds, which are lucky to provide 5 percent after inflation is factored in. Fortunately, it’s perfectly legal to buy real estate with an IRA account, which also allows buyers to take advantage of tax-deferred growth and secure additional income for retirement.
“Wien expects inflation and interest rates to rise”, wrote Investopedia. “Bond yields [last Wednesday] set another round of multiyear highs, [which is] another indicator that inflation could rise as a negative headwind”.
So, what’s the best strategy moving forward? Definitely diversification outside of traditional stocks, bonds and mutual funds. For too many Americans, financial stability is still a tricky balancing act, with long-term financial security always staying just out of reach. At least one-third of adults in the U.S. are dealing with massive income fluctuations from one month to the next, often due to irregular work hours and layoffs, and this income volatility is expected to grow as more and more Americans join the gig economy, leaving many wondering what the best ways to invest money really are in 2018.
In addition, while mobile banking has greatly improved the average person’s ability to access basic banking services, at least 20 percent of U.S. households are still underserviced by the banking industry. Many of these individuals still don’t have credit cards, still are unable to get affordable loans and may be forced to rely on payday lenders.
Financial challenges might look different across various demographic groups, but at least half of U.S. households can expect to deal with at least one major unexpected expense every year, and that number is expected to continue growing as health care costs rise. At the same time, student loan and credit-card debt are keeping many would-be investors from climbing the economic ladder, building rainy-day savings, affording insurance… The list goes on… Not to mention making it harder to achieve basic goals in life, such as owning a home, starting a business… And of course, planning for a secure retirement.
In fact, 28 percent of non-retired adults have no retirement savings at all and the majority feel stuck with limited options in a traditional IRA account or 401k plan. Americans need innovative new financial vehicles to provide income for retirement and help balance income volatility, manage expenses and lend greater stability. This will include more affordable banking and more flexible loans, as well as smarter ways to increase retirement savings, such as buying real estate in an IRA account. Access to these opportunities can help ensure Americans’ long-term financial security and grow the broader American economy.
When do you think a stock market correction will happen? Let us know in the comments!
Read Getting Smart With: Real Estate Investing Instead of Stocks and see why investment properties offer greater stability and higher return on investment over time.