Retirement Investing: Stock Market vs. Real Estate

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Information about Retirement Investing: Stock Market vs. Real Estate
Real Estate

Published on September 30, 2014

Author: SafeguardAdvisors

Source: slideshare.net

Description

Learn how investing in real estate can have much more stable, consistent portfolio growth compared to investing in the stock market. During the stock market crash of 2008, investors realized that the volatility and high risk of the markets caused their retirement savings to lose a lot of money. Investing in real estate through a self-directed IRA can have profitable outcomes when investing for long-term gains. See how the two strategies compare!

RETIREMENT INVESTING: STOCK MARKET REAL ESTATE PERCENTAGE OF AMERICANS INVESTING IN STOCKS" (from April of each year 1999-2013) ‘via individual stock. mutual fund 401(k) or IRA 2% 62% 67% 52% 55% 52% s 50% 61% 61% 53% 57% _ ° 58% 54% 53% 52% . : : 5% 1 investments 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 With the average American focused on short term growth through stocks for the majority of their investments, the volatility of the stock market can bring this investment strategy crashing down in a short period of time. To place a hedge against loses and inflation, investing in real assets such as real estate can be a much more profitable approach. Self-directed retirement plans used as a vehicle to invest in real estate allow you to control your own investments and pave the way for long-term, sustainable growth. FAST AND FURIOUS: AN AVERAGE PORTFOLIO FOR GROWTH I 25%-* bonds - 70% slocks lbolh foreign and rlonieslicl short term BY THE NUMBERS: RECESSION OF 2008 JOBS ADDED OR LOST January 2007 — March 2009 500,000 -500,000 -1.000.000 -1.500.000 -2,000,000 -2,500,000 -3,000,000 ‘07 KEY 1 st Quarter ‘07 2nd Quarter ‘07 2 3rd Quarter ‘07 1 4th Quarter ‘O7 1st Quarter ‘08 ] 2nd Quarter ‘08 K 3rd Quarter ‘08 - 4th Quarter ‘O8 1st Quarter ‘O9 ‘08 '09 NATIONAL UNEMPLOYMENT RATE (%) GROSS DOMESTIC PRODUCT (%) January 2007 — March 2009 3.1% 7.3% January 2007 — March 2009 11% 2.7% -8.2% STOCK MARKET CRASH: DOW JONES INDUSTRIAL AVERAGE January 2007 — March 2009 NOV 2007 Treasury MAR 2008 JAN 2007 Secretary Federw Resewe JUL 2003 DOW ITIIS IBUITCITGS I bails out Bear Fannie Mae ‘2~°°°+ “3“°e”“”d" T0 Stearns (the first and Freddie 15 ooo purchase toxic casuany of the Mac baned ' debt subprime OUI OCT 2008 mortgage crisis) °C0n9r€SS 933365 $700 billion bailout bill -Dow drops 800 points to under 10,000 (first 12500 time since 2004) AUG 21117 DEC 2008 Federal Reserve recognizes bank now down 10,000 liquidity problem, starts selling SEPT 2008 nearly 34% reserves Of Treasuries and -Lehman Brothers declares bankruptcy for the year accepts subprime mortgages -Money market funds lose $144billion from banks as collateral -Senate votes no on bank bailout bill, Dow falls 777.68 points (largest single day drop in history) 7 500 NOV 2008 -Big 3 automakers ask for bailout wag? -Dow falls to 7,552.29, a new low 6500 (“S We 5,000 market bottom) JAN MAR MAY JUL SEP NOV JAN MAR MAY JUL SEP NOV JAN MAR ‘O7 ‘O7 ‘O7 ‘O7 ‘O7 ‘O7 ‘O8 HOW DID THE CRASH OF 2008 EFFECT 401 (k)s? ‘O8 ‘O8 ‘O8 ‘O8 ‘O8 ‘O9 ‘O9 (measured from Jan 200810 Jan 2009) 401(k) Account Value Percentage Lost ‘25% — ‘ I < $10,000 DO AMERICANS TRUST THE STOCK MARKET? U. S. Investors’ Feelings about Investing Their Own Money in the Stock Market (poll taken 6/14-7/14) 1*? ) No Opinion All Nervous 34% Somewhat Nervous 38% A Little Nervous STOCKS Stocks gain over 14 year period (September 10, 1999 — September 9. 2013) . ‘I1 % Extremely Nervous 15% - 3 Not at . CRUNCHING THE NUMBERS: REAL ESTATE VS. STOCKS mfg Dow Jones Industrial Average R 21% P 15% 0% . up to 43% IT’S A MARATHON, NOT A SPRINT In April 2014, Americans Felt Real Estate was the Best Long-Term Investment 7%[I Bonds ' 38% Real Estate 30% Stocksl Mutual Funds 18% Q 7% Gold Savings Accounts/ CDs 15,063 Stock Market ' 44% GAIN grew from 10,462 to 15.063 (44% gain) I ISAFEGUARD IRA & 401k Advisors www. ira123.com 5’, 3.14% ANNUALLY A $100,000 investment would have produced a $44,000, 44% gain ($3,142/year or 3.14% annually) Sources: Gallup com, lbbotson Associates. Bureau ol Labor Statistics CNN Money, Employee Benefit Research Institute, Bureau of Economic Analysis, Safeguard Advisors Copyright '2? 2014 Safeguard Infographic designed by Mad Fish SEO

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