Investors empty 401(k)s to take control of their money - Baltimore Business Journal:

ikefageze.blogspot.com
Sandidge, president of Scottsdale financialfirm , has lost more than $250,000 from his 401(k) since Septemberf — more than half its savings. “uI just got tired of watching mymoneyu disappear,” he said. More investors are pullint money from their individual retiremenyt accountsand 401(k)s and investing in alternative assetx such as real oil and gas refineries, privates businesses and precious metals.
The stoci market crash in 2008 — whichh saw the Dow Jones Industrial Average sink 32 percent and the Nasdaqq nearly 41percent — crackecd millions of nest eggs, prompting investors to tradse some of their stake in the equity markets for illiquidc assets, either through their employer-offered retirement plans or by establishinyg self-directed accounts. “People just want more choices,” said J.P. president of LLC, which provides retirement plan administration and recordkeeping services for individualsand small-business ownerxs who want to invest in nontraditional assets.
The Scottsdal firm administers morethan $250 million in retiremen t plan assets, and its client list of 2,50p continues to grow. Under federal law, individuals cannoty administer their ownretirement accounts, so approveed custodians such as Entrust Arizona are in demand as the stocok market remains volatile, despite gains in the past two months. Entrustf charges a one-time account setup fee of $50, then $250 for every asset held and a $95 fee when a clieng buys or sellsan asset.
Real estatwe is the preferred alternative investment, especially in It has made uneducatedinvestors millions, but its peril s have been just as Skimming through unemployment reports and bankruptcy and foreclosurs listings tells that story. When the real estatr market tanks here, so does the economy. Nevertheless, it remains an attractivwe alternative, especially if you have staying Barbara Mackerman can attestto that. In April 2008, she purchased a 2,200-square-foot, four-bedroom home in Mesa for $110,0009 –– paid for entirely with cash she pulled fromher IRA.
Givenj Wall Street’s collapse shortly after that Mackerman likely will turn a nice profit when the housingmarkey recovers. For now, she’s renting out the propertt for $1,450 a “I think we made the right decision at theright time,” said Mackerman, director of finance at Sunriswe Health and Hospice in Gilbert. “Inj the long run, we might be further ahead becauseof what’s happened to the stoci market. Time will tell.” Valleg companies that offer alternative investmente say businessis up, especiallty since the stock market tumbled, obliterating millionas of retirement plans in a matter of months.
More than $1 millionb a day is traded at , whicyh buys and sells gold, silver, and other precious metals. Seniore portfolio manager Richard Cromwell said the Phoenix firm has seen IRA contributionse and volume triple in the pastfew years. “Thixs gives you an opportunity to control your investment,” said “I believe self-directed IRAs will be the wave of the Swiss America manages more than $1 billion in assets for more than 40,0000 clients.
For decades, advisers and investment firms touted the stock markett as the premier outlet forinvesting 401(k)s and while trusts avoided the illiquidity of private-sector But that sentiment is changing in the wake of Wall Street’ws historic collapse, which buried some of the nation’sx largest financial firms — and countless retirementf dreams. Trusts are taking a more entrepreneurialpositionm now. “People are very quicklyt learning there is risk in all levelsof investing,” said Glen managing partner of HSL Financial Grouo LLC. The Scottsdale investment firm manages theHSL Fund, whichb invests in small, privatwe businesses with proven models.
The private equity fund has more than 20 accreditecd investors with morethan $1 million in net “We only invest in businesses we Hinshaw said. “A lot of wealth is stilol sitting insmall business.” Entrust Arizona LLC: Swiss Americaa Trading Co.: