Listening to the news or reading government statistics we know:
- US GDP decreased by 5% in the first quarter of 2020 and a whopping 32.9% in the second.
- US personal income decreased by 4.4% in May and another 1.1% in June.
The following and other government statistics make for good headlines, but, can be meaningless for anyone planning to invest. Most of us don’t know a business that decreased by 32.9% in the second quarter. However, many of us know businesses that have plunged by more than 50% while other businesses have skyrocketed! In other words, government statistics are nothing but an average. The problem with applying this information is that no one is exactly average.
|Decreased 70-90% in the 2nd quarter||Increased 25-60% in the 2nd quarter|
Movie theaters and other entertainment establishments
Tourism; hotels, casinos, etc.
Hospital general admission
|Office furniture for home offices
Outdoor recreation; RVs, pools, grills, bikes, rollerblades
How to invest in this environment
A simple investor will pick a side. Either “things will be great very soon” or “these are dark hours and the worst is yet to come.”
Which do you believe?
-Has America changed forever? In the future, few will fly or need a hotel room.
-Similar to after 9/11, some people thought no one will get on a plane again, yet within 12 months air travel was back to normal.
-Home furnishings will remain hot for the next decade.
What is smart money doing
The smart money isn’t picking a side. They never try to be 100% right at the risk of being 100% wrong. Much of the smart money is skipping the all-in or all-out guessing game and instead, moving money to make investments that are reliable and predictable. Will these investments have the #1 return in the next decade? Nope. That will be some stock that probably has not even come to market yet. In times of uncertainty, the smart money is moving toward investments that can provide reliability and predictability.
What investments are they looking at? The ones right in front of them. It is the house down the block, around the corner, across town, or the country. It’s residential real estate. The old saying is true, “Everybody has to live somewhere.” In times of turmoil, the investor who has a portfolio of reliable and predictable investments is king.
Here at IRA Club
Many Self Directed IRA owners are doing the same. This past month, IRA Club assisted over 300 clients purchase homes using the money in their IRA or old 401k. Have you considered real estate inside your IRA?
Be advised that IRA Club does not evaluate, review, monitor, recommend, warrant, guarantee or otherwise endorse the legality, tax treatment, propriety, performance or reliability of any investment, service, statement, opinion or other representation provided with respect to the investment opportunities listed on its site or their sponsors or providers. IRA Club has no financial arrangement, partnership, joint venture, or other affiliation with the sponsors or providers of these investments. IRA Club shall not be liable for any misinformation, misrepresentation, negligence, act, omission, investment results, or any wrongdoing with respect to any of these investments or their sponsors or providers.