On paper, 2015 shouldn’t have been a terrible year for stock investors; the S&P 500 ended the year just 1.75 percent above where it began. Jim Hitt says, “Self-Directed IRA investors who diversified their portfolios realized a much better outcome.”
Charlotte, NC (PRWEB) May 10, 2016
The value of a Self-Directed IRA is the ability to diversify assets beyond stocks, bonds, and mutual funds. According to data from Openfolio, an app that lets users compare how their actually investments are faring against others who are using the app, taking cash flows into account, the vast majority of stock investors actually lost money – 3.09 percent, on average. In other words, the average investor lagged an un-managed index by as much as 4.84 percentage points, once you take actual cash-flow adjusted returns into account.
“Stocks are a tough asset class to get market beating results in,” says Jim Hitt, president and CEO of American IRA, an Asheville, North Carolina-based firm that supports investors who prefer to use Self-Directed IRA accounts to invest retirement money in alternative or unusual asset classes not often found in IRA and 401(k) accounts. “Even the best, most experienced fund managers have trouble. The average investor playing the stock market is at a huge disadvantage. A lot of our clients prefer to sidestep the S&P issue and invest directly in gold, real estate, private equity, private placements, and other areas where they aren’t competing directly against institutional investors,” Jim Hitt continues.
Younger investors fared worse. The burden of lackluster return fell primarily on younger investors last year: Investors age 25 and under lost an average if 3.8 percent last year, while 50-64 year-olds lost an average of 2.2 percent.
Even normally risk-averse senior citizens managed to convert an up year for the S&P into actual account losses – losing 1.7 percent, on average, over the year.
Women, as it happened, outperformed men, by a healthy margin: Men lost 3.78 percent over the course of the year, on average. Women only lost 2.54 percent.
And how did financial professionals fare? Dismally, say Openfolio’s data. Financiers lost more than 4 percent – far worse than techies (-2.12 percent), engineers (-2.04 percent) and the top-performing profession on the job: teachers, who lost a modest 1.5 percent, on average.
Jim Hitt says, “It really goes back to the tried and true method…diversification. Investors need to broaden the asset areas they invest in so that their overall portfolio remains intact even when one asset fails to perform.”
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For the original version on PRWeb visit:http://www.prweb.com/releases/2016/05/prweb13401989.htm