It’s everywhere. You’ve heard it, you most likely felt it, and you can’t escape it. Last week, the Dow Jones industrial average had its worst ever two-week start to a new year, and the S&P 500 index hit its lowest level in more than a year. This frantic downswing has many investors worried about their financial security and future plans. Among those anxious about the current state of the stock market, retirees are feeling the full burden as their portfolios are taking a turn for the worst. According to an American College survey, over 60% of clients of retirement-income certified professionals were concerned about the recent stock market volatility and its rippling effect on their retirement security (Forbes).
If retirement is within the current year, these upcoming retirees have a valid reason to be fearful, as stock market analysts are projecting a flat market for 2016 or much worse. Albert Edwards, an economist at Societe Generale, gathered over 950 financial professionals on January 12th to discuss how the imbalances in the financial system will lead to a complete collapse (Business Insider). The Royal Bank of Scotland further supports this projection by forecasting a sequel to the 2008 financial crisis, where US stocks will fall by 20% and oil will decline and trade at $16 a barrel (NY Mag).
Whether it is a flat year or worse for the stock market, there is one commonality that many financial advisors are urging their clients to look into – alternative assets that generate income and diversify your portfolio away from the stock market. Forbes columnist Jamie Hopkins recommends retirees tap into non-market correlated income sources. Our Research Services team agree, as they took a deeper dive into the single family rental market for 2015 Q4. They forecast a healthier investment market on the horizon for this asset class. Read the full 2016 Asset Comparison Report here.