Wednesday, February 20, 2013

Is It Better To Hold SFR Investments Inside Or Outside An IRA or ...

Absolutely it's ridiculous to compare a roulette wheel to investing in trust deeds. But not any more ridiculous than to refer to high yields without referring to risk. Risk is a player in every investment decision, whether that decision is a treasury bond, a house, a trust deed, or a roulette wheel.

So why does putting investment returns in the context of their risk offend you so much that you ask that I be ignored? I never said that trust deed investment was equivalent to the roulette wheel. I actually didn't know we were talking about trust deeds so I couldn't have been comparing the 2. My initial reference to risk was that houses can often yield a very low risk 8%. To which you responded that higher yields are possible. I agree, but without knowing the risk involved that's a meaningless number. Hence the obviously offensive reference to putting it on black.

Retirement savings is about getting good returns while balancing risk. There are always ways to rev up returns, but they involve increased risks. Maybe that increased risk is appropriate for a retirement fund, maybe not.

Stocking picking systems will promise huge returns if you follow the right guru. And real estate has more than it's share of prophets, all of whom for a fee will lead you to the Promised Land.

But without understanding the risks involved the promise of higher returns is meaningless. That was my only point.

Source: http://www.biggerpockets.com/forums/12/topics/83530-is-it-better-to-hold-sfr-investments-inside-or-outside-an-ira-or-401k

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