By J.P. Dahdah, Founder & CEO of Vantage
It is news like Brexit that deepens my love for alternative investing. The financial channels and the media are creating a frenzy about the historic event which concluded in the United Kingdom voting to leave the European Union (EU). The U.S. market was down more than 3 percent at the close on June 24th, with the Dow losing over 600 points, after sell-offs overnight in Japan and Hong Kong. Americans are left trying to figure out what all the fuss is about and how to protect their savings from taking another huge hit similar to the “great recession of 2008.” By contrast, there is a group of Self-Directed IRA investors who can sit back, watch this unfold and rest peacefully at night knowing this type of news has little to no negative impact on their alternative investments.
From a political perspective, Brexit is big news and there are lots of opinions about how this moment in history may affect foreign trade policies, global immigration regulations, monetary policies and foreign currency valuations.
But for alternative investors like you and I, there is no correlation.
Will Brexit force your tenant to evacuate your investment property and leave you without rental income? No.
Will the news destroy the validity of the start-up company you decided to fund? No.
Will the borrower your IRA lent money to immediately decide to stop making payments because the U.K. is no longer part of the EU? Absolutely not.
Alternatively…
Did the news significantly increase the volatility of the traditional markets and cause millions of American’s portfolios to lose value? Yes.
Will interest rates remain at historically low levels for longer than expected? Yes.
Are stock market-based investors losing confidence that their IRA will reach the projected 8-10% returns their financial advisors calculated? Yes.
All of this uncertainty and media hype initiates a domino effect that fuels massive disruption on Wall Street. As a Self-Directed IRA investor who made the smart decision to diversify into alternative holdings, you have the peace of mind that opening your statement next quarter will not be a frightening experience. If you are reading this article and you’ve been on the fence about establishing a Self-Directed IRA of you own, perhaps now you will take action with confidence.
Happy Investing!