Why Brexit May Not Impact Certain Investors

Estimated reading time: 2 minutes, 7 seconds

The past few business days have been tumultuous for the stock market in the wake of Britain’s referendum on whether to leave the European Union. The “Brexit” decision sent the Dow Jones plummeting 611 points (3.4%) on June 24. Stocks traded sharply lower on Monday, June 27, as well, with the Dow falling more than 250 points. Despite the markets showing some life today, the last few days have not been kind for public stocks, bonds and mutual funds.

This is why Self-Directed IRA custodians often anticipate calls from retirement account holders looking to exit the traditional markets during such market volatility. Those looking to diversify their retirement portfolios can take control of their retirement futures by investing in alternative assets.

The Brexit impact may be less, or perhaps even nonexistent, for those that invest in alternative assets.

Those investing in private, alternative assets, particularly Self-Directed IRA holders, may be unfazed by Brexit for one primary reason. Stock market turmoil normally doesn’t impact alternative assets held in a Self-Directed IRA. Some assets may oftentimes run counter to traditional markets.

Gold prices soared on Friday after the Brexit vote. Precious metals are considered by many to be a safe-haven asset during market volatility. Gold, silver, platinum and palladium investors often consider such investments as hedges against market turmoil just like this. Precious metals investors often look to centuries’ worth of wealth preservation using physical gold and silver as evidence of their stability.

BrexitLet’s look at it from another perspective. The value of local commercial property may be unaffected by Britain’s decision. This is especially true in areas that show consistent growth in real estate values regardless of geopolitical turmoil, inflation/deflation and so on. Many investors believe that real estate has proven time and again to withstand shaky markets. Real estate investments are also insurable, which means they cannot just disappear into thin air like Wall Street investments.

The same argument is made by Self-Directed IRA investors for other assets like private companies, promissory notes and more. What happens on Wall Street may not directly or indirectly impact these types of private investments. When uncertainty and panic take bites out of the market, alternative assets seem more and more palatable to savvy investors.

You, like many investors, may believe that the key ingredient in any stock portfolio is diversification. There may perhaps be no better way to diversify than with private, alternative assets that aren’t tied directly to the stock market. Fed up with the ups and downs of Wall Street? Consider opening a Self-Directed IRA today to begin the process of alternative investing.

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