Many people depend on the stock market to produce investment returns that will make comfortable retirement possible. That might seem like a reasonable strategy in general, but rapid reversals or simple volatility can leave a disciplined investor facing an unpleasant future.
When stock market losses occurring close to retirement diminish the value of a portfolio, it is often best to change gears. Moving into assets like real estate can end up being the best way to get back on track without delay. As details at NRIA show, real estate is an investment option that quite often makes excellent sense when stocks do not.
An Investment Vehicle Frequently Worth Considering
It is easy to understand why so many individual investors focus on the stock market above all else. Historical returns from equities have rivaled or exceeded those of all competing investment options.
Investing in the stock market is also very easy, whether for those who trade specific stocks or the many who now stick to exchange-traded funds. The equity markets support virtually any style of investing, from those that emphasize rapid turnover to the buy-and-hold strategies favored by so many professionals and amateurs alike.
None of this is to say that investing in the stock market is always the best option. A clear-eyed look at history shows that investing in real estate can be just as rewarding in purely financial terms.
In fact, real estate often performs well at times when stocks are floundering. Like the commodities investors sometimes flee to, real property has inherent value that persists through even through the most challenging times.
Well-Established Factors Make Real Estate Investment Even More Attractive
All this can make investing in real estate the best and easiest way to respond when stock markets start heading downward. This is particularly true for investors who are getting ready to retire and need to combine performance with a certain level of security.
Fortunately, it tends to be fairly easy to recognize when investing in real estate will help shield a portfolio from the impact of a weakening stock market. When interest rate are relatively low by historical standards, for instance, real estate tends to perform quite well.
Having the ability to target particular geographic markets also means being able to identify safer and more potentially rewarding real estate investment options. Every recession or other sort of economic trouble affects different communities in distinctive ways. Investors who can figure out which cities or states are likely to weather economic disruption the best can use real estate to turn their insights into profits.
More Investors Opt to Emphasize Real Estate as Retirement Draws Closer
While investing in real estate can be a great way to revitalize a portfolio that was undermined by stock market losses, this is not the only option. Many investors have come to see an emphasis on real estate as a natural way to shore up their positions when the time to retire comes closer.
Such a proactive stance can be complemented by the emphasis on fixed-income securities that so many experts already recommend. Adding some strategic real estate positions to a portfolio before retiring can preserve much of its potential for appreciation while reducing its overall exposure to risk.