A report out today on TheStreet.com indicates that Americans with 401(k) retirement plans lost, all told, about $1 trillion in . . . THE STOCK MARKET CRASH.
For some time people have been saying 401(ks) were bad investments. I disagree. It is where that 401(k) money was invested that tanked, not the investment vehicle itself.
Nevertheless, the report says no one was spared. There was no where to hide as even mutual funds were impacted. In many cases, investors saw the value of their portfolios pushed back to values found 10 years ago, analysts say. Further, analysts are reminding investors what they forgot: that the 401(k) was never meant to be a primary investment tool. It is supposed to be a means for employer matching (for those employers still providing matching funds) and a way to defer income taxes on income.
So why do I bring this up? While commercial/investment real estate is experiencing its own pains at this time, values of properties that were bought at reasonable values, with reasonable leverage, are doing fine. Vacancy rates may be up slightly in some markets, and in some industry segments, but people owning income producing buildings do not have a situation where the value of their portfolio has dropped so precipitously that it is valued at a 10 year old price. In fact, with inflation starting to creep into the picture, some values are slowly rising here and there.
Of course, with this news come the usual call for "government oversight." Sigh . . .
Listen, if you want to be paid first, and not last, ownership in commercial/investment property puts you in charge. I have written on this before. And 401(k) funds can be rolled over into self-directed IRAs, and the IRAs pick up properties coming on the market at a bargain.
More to come on this . . .