Although 2018 has already seen a fair share of stock market volatility and uncertainty, many investors are still riding a high that’s managed to hold on for an impressive run… A run that has prompted yet another seasoned investment manager to issue a warning that prices, “can’t get better than this,” adding that the current environment has also negatively impacted the likelihood of long-term returns. Fortunately, real estate investment can help offset this to produce ongoing retirement income.
“It is simply not possible for market participants to make long-term gains from current U.S. stock prices”, stated investment manager Peter Toogood of Embark Group in a recent CNBC interview.
Read on to learn how the current bull market has impacted long-term returns and also see why there has never been a better time to diversify your financial portfolio with a smart real estate investment strategy.
Stock Market Truths
Although most analysts agree that Wall Street is still in the midst of a bull market, it’s impossible to ignore the fact that late August marked the longest run-up in stock valuations in history. This, combined with the fact that the S&P 500 has quadrupled in value since March of 2009 should make investors weary of what might come next. In fact, most advisors seem to believe that it’s only a matter of time until the streak comes to an end, with the big question being much more about “when” than “if.”
“It can’t get better than this, absolutely can’t get better than this”, Toogood said. “But don’t worry it will carry on because Wall Street says so… It is nonsense, utter nonsense”.
Also, Toogood points out a harsh reality about bull markets: If you buy into the stock market at this price point, you will not make long-term return on investment. Period. This valuation metric is a matter of fact, not opinion, and when markets remain this high it also makes it harder to grow. Fortunately, with smart moves aimed at portfolio diversification using stable, proven, income producing alternative investments, it is possible to weather any coming storms and protect your hard-earned assets from ongoing stock market volatility.
Why Real Estate Investing?
As the stock market veers unsteadily between devastating drops and soaring highs that inhibit long-term growth and usually wind up raising interest rates, real estate investing offers a safe, proven and stable alternative to this roller coaster… If you know where to look!
The best real estate investments are going to be found in a great location that is in high demand with a history of steady, planned growth. Also, it’s unlikely that you will find everything required to make a fantastic real estate investment in your hometown, so open up to the idea of buying property in another city, state or country. The key is to make finding the very best investment property in the very best location the two most important elements in your search. Here are a few more things to consider:
- Is there a strong tourism and vacation home rental market?
- How close is the nearest major international airport?
- Does the area have modern infrastructure?
- Are there plenty of activities and attractions in the region?
- How expensive is real estate in the area?
- What plans for future development are in place?
Once you’ve found an area of interest, be sure to spend time getting to know the region firsthand. It’s also essential to develop a relationship with a local real estate investment advisor you can trust. Ask for client testimonials and double-check any claims that seem too good to be true. Remember that you can also invest in real estate using funds from your IRA account, so be sure to explore every available option before settling on a real estate investment that’s right for you.
Do you have questions about real estate investing? Post them in the comments!