By J.P. Dahdah, Founder & CEO of Vantage
Everywhere I turn, I hear grumbling about the “volatility in the market.” I turn on CNBC and it is all about how volatility is erasing billions of dollars from investor portfolios. I pick up the Wall Street Journal and see pictures of traders super stressed about the massive daily swings they are experiencing.
The recent volatility has led to market uncertainty, a lack of investor confidence and double digit negative returns.
What is my response to these financial news stories? A joyful quiet chuckle.
I am certainly not joyful because people are losing money. I am joyful because the lack of correlation my alternative investment portfolio has to the traditional stock market provides me with peace of mind, which is one of my main goals as an investor. This is why I love alternative assets so much. I want to feel comfortable about where and how my money is working for me. I do not have to panic about the continual ups and downs being experienced by the majority of savers in our country; those who have chosen to place their faith in Wall Street.
Are my alternative asset values going to be affected by who is elected President this fall? No.
Are my asset values going to be affected by the Greek economy? No.
Is my portfolio going to be affected by Apple’s recent stand against the U.S. Government demands to share their user’s private information? Nope.
You see, my alternative investments are not influenced by macro-economic or political conditions. Are they completely protected against losses or risk? Of course not, but the risk is limited to specific independent factors, not influenced by broader issues that can impact stock market conditions.
When others express their anxieties about how a negative news report may put a dent in their retirement account, I can’t relate. Some advisors and investors attempt to downplay alternative investments because of their “lack of liquidity.” When I hear that I immediately remind them that because of their illiquid nature, I love owning them in my Self-Directed IRA…an illiquid investment vehicle by design. I cannot touch the money in my IRA without penalty until I reach the age of 59 ½, so investing in illiquid assets, which may take 3-7 years to produce my expected returns, is perfectly OK with me. I would much rather have illiquidity in my IRA than massive instability, and I know that our Self-Directed IRA clients agree!
So the next time your friend, co-worker, neighbor or family member is complaining about the volatility they are experiencing in their retirement portfolio, be sure you encourage them to call Vantage and to learn about the power of the Self-Directed IRA!