Now the big one that everyone’s talking about lately is the craze, the cryptocurrency. Should you have some cryptocurrency in your portfolio, and should you have it if you’re in or near retirement? Now, crypto currency is very, very new. And what we suggest is to stay with the basics, especially in our near retirement. Cryptocurrency can have some big rewards, but it also comes with a lot of Risks. So unless you’re prepared to lose a lot of money, then we would suggest to not be in any types of cryptocurrency.
Private Real Estate Investment Trusts
The next thing which we see a lot of people have when we see people get burned quite often in are the private real estate investment trusts. And the reason why is because they’re not always funded like they should be. We’ve seen people and we’ve heard about the Ponzi schemes, but then we also see this nice shiny object of these great returns that you’re supposed to get. Now the issue here is that they’re not liquid. They’re very illiquid assets, so it makes it very hard for you to get your assets if you need them, and if we have a market correction, they can decide whether or not they want to allow you to take money out of it. So every now and then they’ll give you a quarterly statement, they’ll say, “Hey you can take some money out”, but if the market changes, they might not allow you to take any money out of that fund. And what we see is that those funds can drop significantly in value and then you’ll get some other people that send you some mail saying, “Hey we’ll buy your shares from you and we’ll buy it for pennies on the dollar.” So you have to be really careful with private real estate investment trusts, and if you are going to have them, make sure they’re not a large portion of your portfolio.
The next thing that is certain annuities, especially variable annuities. Now, variable annuities have their place but you have to be very careful with variable annuities, because if you’re going to be in a variable annuity it means you’re still in the market but you’re paying a lot of fees for that variable annuity. Now it might provide some guarantees when it comes to income, but at the end of the day if you’re going to be in the market with a variable annuity, why not just be in the market and save yourself a lot in fees?
The last thing that we want to bring up here is private debt. Now private debt is very attractive lately because again, it’s a very shiny object. You can get a lot higher interest with private debt than you would with corporate bonds or something like that. We have to be very careful, because again, it comes with a lot of risks. And again, these days or position that won’t have a lot of risks but they do have a lot of risks because you have to be very careful, especially when you’re in or near retirement.
Now when you’re in your accumulation years, when you’re younger, you might be able to take some of that risk, but when you’re now in retirement and you now need to distribute those assets safely for it to last 30 or more years, you want to be very careful with the assets that you pick, or the investments that you pick to make sure that you’re going to have that income to last the rest of your life.
Now if you have any other questions around any particular investments please give us a call or send us an email. We will make sure to answer your question. As always, appreciate you watching, and if you have any other questions that you want us to answer with a video, please let us know. Thank you.