Retirement Investing: Stocks versus Real Estate

There’s a lot of options for retirement investing and saving.

According to Safeguard IRA & 401K advisors, most Americans are still focused on investing in the stock market which often yields short-term gains. There’s alternative assets that people can look at that are sustainable and profitable and yield long-term growth.

Safeguard focuses on a self-directed real estate IRA. They recommend investing in real assets, like real estate, because it can hedge against inflation and losses from the volatility of the stock market.

Most Americans have a portfolio consisting of 70% stocks, both foreign and domestic, 5% short term investments, and 25% bonds.

In the recession of 2008, an incredible 3.5 million jobs were lost over the course of 3 years. The unemployment rate skyrocketed from 4.4% in 2007 to 8.7% in 2009. This meant that gross domestic product (GDP) also dropped. In 2007, GDP was at a high in the 2nd quarter to 3.1%. The lowest point was in the fourth quarter of 2008 at -8.2%.

Of course this meant that the stock market prices dropped. The DOW was at 12000+ in 2007 and dropped to 6,500 (almost half) in March of 2009. Of course this affected 401ks drastically. If your 401K was 200,000+, it’s likely you lost 25%. If your 401K was 100,000-200,000, you lost 21%.

There’s plenty more to read in the infographic below. Take a look.