Unfortunately, most won’t take action till the market hits bottom, and extra taxes have stripped them of the rest. That’s when they should be buying. Instead they are stuck with nothing left to reinvest elsewhere.
CHICAGO November 15, 2017
Between a massive change in tax laws and a bubbling stock market, we are likely to see an unprecedented change in our finances in the months ahead. Some of the effects of new tax code changes will hit individual investors and regular taxpayers hard in the new year. The stock market was called 60% overvalued several years ago, and has only become more inflated since then.
Depressions and recessions have come and gone, and many are still struggling to recover. This time it could be even bigger. Even without a major stock market correction, the stripping away or limiting of a variety of tax deductions could rip deep into many investments and the gains they were hoping to deliver.
Taxpayers have been given some alternative havens, and savvy investors who know when to act may escape to greener pastures and do very well in the years ahead. However, as during past downturns there will be many who just don’t ask fast enough. They will buy into the hype of holding on or that it won’t be that bad, or it is just a blip. Jon Kopp, Director of Non-profit organization SDIRA says “Unfortunately, most won’t take action till the market hits bottom, and extra taxes have stripped them of the rest. That’s when they should be buying. Instead they are stuck with nothing left to reinvest elsewhere. Even a 50% drop in stock values can require many years of strong returns just to get back to par. It’s just too late for them. It’s a situation in which many will never recover from, or at best will miss out on their lifetime potential.”
The few winners and survivors are those who make changes to their finances and portfolios before the crunch starts happening. They have the benefit of keeping the most of their current capital, and putting it into growing investments, and investing through tax sheltered vehicles which let them keep even more of what they make.
Right now, self-directed retirement investment accounts appear to be one of the few tax shelters that will be left in place in 2018. When others start bailing on stocks we typically see a new surge in other alternative assets like real estate. Combining these two strategies could be what saves many. Though whatever changes investors make, time is of the essence.
To learn more visit http://www.sdira.org
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