Posted on April 14, 2014 by accuplan-admin
IRAs and 401ks are retirement accounts that give you great tax benefits for retirement. Typically there isn’t much diversity in most retirement accounts because most IRAs and 401ks are invested in stocks and bonds. This leaves your retirement accounts very dependent on how well the stock market does. The stock market is quite risky and the current state of the stock market is pretty shaky.
Current Stock Market Outlook
The S&P 500 Index was up 1.8% during the first quarter of 2014 while the Down Jones Industrial Average was down .2% for the quarter. The performance is nothing to write home about. There are many investor gurus who are quite skeptical about the near future of the stock market. There are plenty gurus that have the opinion that the US and global economies are likely to have a slow steady growth over the next several months. Even though the outlook seems to be on the rise there seems to be a big consensus that it will be a pretty bumpy ride over the next few months.With that said there is also a lot of consensus that there seems to be a correction on the horizon but who knows when. At the end of the day nobody knows what the future holds for the US and foreign markets.
What Does All This Mean
What it really comes down to is that there isn’t any sure way to tell what the market holds but there are ways to get an idea of what it holds and the true future outlook is shaky! Knowing that the future outlook is shaky what should you do? You should diversify!
Diversify
It is very smart to diversify your investment portfolio, especially your retirement portfolio. Diversifying your portfolio is always a very wise decision. There is truth that a diversified portfolio might not be able to make as much as other non diversified portfolios but because it is very hard to actually beat the markets all the time it is good to have a great spread. To learn more about diversifying your retirement account check out, The Way To Diversify Your Retirement Portfolio.
Diversify Through A Self Directed IRA
While you can diversify your retirement account by making sure that the stocks and bonds that you carry are quite diverse and fairly evenly weighted. While this is an option for diversifying it isn’t the best way to diversify your retirement account. The best way to diversify your retirement account is through a self directed IRA or self directed 401k.
What a Self Directed IRA and Self Directed 401k Allow you To Do
A self directed IRA and 401k allow you to invest in things that aren’t normally available to you through most custodians. Most custodians (those who hold your retirement account and invest it for you) do not allow for investing in much else besides stocks and bonds. This is pretty lame becaues you are missing out on investing with your retirement more diversly and you are also potentially missing out on great investments while getting the great tax benefits that come with a retirement account. If you would like to invest your retirement in things other stocks and bonds you typically have to go to a custodian that allows for self directed retirement accounts.
What Types of Investments Are Allowed In A Self Directed IRA And 401k
Self Directed IRAs and 401ks offer just about endless possibilities to investing with your retirement accounts. Just about anything you can dream of investing is is possible through a self directed account. What are some of the most popular investment types in a self directed IRA? Gold, silver and real estate are some of the biggest investment types along with private placements. Because you are able to do just about any type of investment with a self directed account there is no better way to diversify your retirement account. If you feel the stock market is going to be in a bad spot over the next while why not invest in gold or real estate?
There are so many ways to diversify your retirement portfolio through a self directed IRA. Take advantage now by setting up an account or call us and learn more about what a self directed IRA can do for you. Don’t wait long to take advantage especially while there is a lot of uncertainty about the current future of stocks.
Author: Nick Barker
FAQs
A slight acceleration for advanced economies—where growth is expected to rise from 1.6 percent in 2023 to 1.7 percent in 2024 and 1.8 percent in 2025—will be offset by a modest slowdown in emerging market and developing economies from 4.3 percent in 2023 to 4.2 percent in both 2024 and 2025.
Should I pull my money out of the stock market? ›
Key Takeaways. While holding or moving to cash might feel good mentally and help avoid short-term stock market volatility, it is unlikely to be wise over the long term. Once you cash out a stock that's dropped in price, you move from a paper loss to an actual loss.
At what age should you get out of the stock market? ›
There are no set ages to get into or to get out of the stock market. While older clients may want to reduce their investing risk as they age, this doesn't necessarily mean they should be totally out of the stock market.
What are experts saying about the stock market? ›
While there could be a growth slowdown in the first half of 2024, experts believe growth should resume in the second half of the year. Americans faced many financial challenges this year, from persistent inflation to increasingly expensive debt.
Where will the stock market be in 2025? ›
The S&P 500 still has 30% upside between now and the end of 2025, according to Capital Economics. "Our end-2025 forecast of 6,500 for the index is premised on its valuation reaching a similar level to its peak during the dot com mania," Capital Economics said.
Will there be a recession in 2024 or 2025? ›
According to Wang and Tyler, the economic data should "give more confidence that the US economy is recovering in additional sectors" and that "recession fears for 2024 are likely to be pushed into 2025."
Who keeps the money you lose in the stock market? ›
No one, including the company that issued the stock, pockets the money from your declining stock price. The money reflected by changes in stock prices isn't tallied and given to some investor. The changes in price are simply an independent by-product of supply and demand and corresponding investor transactions.
What happens to 401k if the stock market crashes? ›
Your investment is put into various asset options, including stocks. The value of those stocks is directly tied to the stock market's performance. This means that when the stock market is up, so is your investment, and vice versa. The odds are the value of your retirement savings may decline if the market crashes.
Should I keep all my money in the stock market? ›
The key is not to put literally all your money in stocks. Outside of your investment portfolio, you should have an emergency fund with enough to cover at least three months of expenses, as well as savings for any short-term goals and large future expenses you need to plan for.
How much should a 70 year old have in the stock market? ›
If you're 70, you should keep 30% of your portfolio in stocks. However, with Americans living longer and longer, many financial planners are now recommending that the rule should be closer to 110 or 120 minus your age.
For years, a commonly cited rule of thumb has helped simplify asset allocation. According to this principle, individuals should hold a percentage of stocks equal to 100 minus their age. So, for a typical 60-year-old, 40% of the portfolio should be equities.
Should a 65 year old be in the stock market? ›
Near and current retirees are often encouraged to invest their money so it's able to grow. If you're 65, it means you may want to keep a notable portion of your portfolio in safer assets. It can still make a lot of sense for a 65-year-old to own stocks.
Are stocks expected to rise in 2024? ›
The S&P 500 generated an impressive 26.29% total return in 2023, rebounding from an 18.11% setback in 2022. Heading into 2024, investors are optimistic the same macroeconomic tailwinds that fueled the stock market's 2023 rally will propel the S&P 500 to new all-time highs in 2024.
What does Dave Ramsey say about the stock market? ›
Historically, the average annual rate of return for the stock market ranges from 10–12%. Remember that's an average—some years you'll see massive returns, and in other years you might see negative returns. But over time, you should see your money grow if you keep it invested for the long haul!
Which stock will boom in 2024? ›
Best Stocks to Invest in India 2024
| S.No. | Company | Industry/Sector |
|---|
| 1. | Tata Consultancy Services Ltd | IT - Software |
| 2. | Infosys Ltd | IT - Software |
| 3. | Hindustan Unilever Ltd | FMCG |
| 4. | Reliance Industries Ltd | Refineries |
1 more rowApr 9, 2024
The 2024–25 Outlook
We expect growth to rebound to a 2.0 percent pace by 2025Q1 and stay in that range through yearend. On a Q4-to-Q4 basis, real GDP grows by 1.8 percent during 2024 and 2.2 percent during 2025.
What is the outlook for US equities in 2024? ›
Key Takeaways. The U.S. equity market's rally at the end of 2023 has left stocks overvalued, with little room for error. Analysts' estimates for 2024 corporate earnings may be too optimistic, given a likely tapering in U.S. economic growth. Markets may also be overestimating the number of Fed rate cuts in 2024.
What is the target for the S&P 500 in 2024? ›
The estimates from strategists put the median target for the S&P 500 at 5,200 by the end of 2024, implying a decline of less than 1% from Friday's level, according to MarketWatch calculations. Heading into 2024, the median target was around 5,000 (see table below).
What stocks are expected to do well in 2024? ›
2024's 10 Best-Performing Stocks
| Stock | 2024 return through March 31 |
|---|
| Janux Therapeutics Inc. (JANX) | 250.9% |
| Trump Media & Technology Group Corp. (DJT) | 254.1% |
| Super Micro Computer Inc. (SMCI) | 255.3% |
| Viking Therapeutics Inc. (VKTX) | 340.6% |
6 more rows