You’re bound to go through several recessions by the time you retire. A trusted way of minimizing their effects on your retirement account is to diversify and establish multiple income streams.
Diversifying your investments can help you weather market conditions and provide you with more flexibility in deciding when to retire. If you’re forced to retire when the markets are down, you may have to start making withdrawals before they bounce back, saying farewell to potential gains that could have materialized just several months later.
The Power Of Alternative Assets
Alternative investments are a great way to diversify your portfolio with assets that are often uncorrelated with other markets. Some alternative investments outperform stocks and bonds, so investing in them could mean the difference between a retirement account that’s going up in value and one that should have been converted to cash.
Including previously neglected assets is especially important in today’s landscape, which has been rough on the trusted 60/40 setup. Vetted alternative investment opportunities could be hard to find, but below, you can find three popular asset classes along with opportunities you can swiftly add to your portfolio. Some of them may require a self-directed individual retirement account (IRA). Before considering the opportunities, remember to only invest when you’re certain that you can tolerate the ups and downs of any given market, which are bound to happen.
Collateralized Notes
When acquiring collateralized notes, also known as secured notes, you act as a creditor to a company seeking funds. They are called collateralized because they are backed by assets that can be sold in the event of a default, which mitigates the risk of loss. Investing in historically reliable classes, like real estate, could add a layer of protection.
After you add collateralized notes to your account, you receive monthly interest payments that are usually fixed, so you know what to expect. After the maturity date, you get your full principal back.
Check out: Passive income investments are one of the most trusted methods for riding out a recession, so it’s no surprise that people are turning to high-yield real estate notes that pay a fixed 7.5% to 9%.
Commercial Real Estate
Despite the general opinion guided…
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