Capstone Capital Partners, LLC | Capstone Fund, LLC

How Are Your Investments Looking?

How Are Your Investments Looking?

We all know how important it is to save for retirement. At some stage in our lives the income we receive is no longer from our jobs or business yet from retirement funds, interest and dividends and social security. Yet unfortunately many don’t pay very much attention to retirement and perhaps only look at their mix of retirement funds once a year when it’s time for the obligatory annual 401(k) review. In this portfolio, the employee is simply asked which mutual fund or mix of mutual funds will be selected for the following year or to leave the existing choices in place. Typically these choices display various levels of risk with the thought being the younger the employee the more risk that can be taken along with the expected returns that are likely to be higher compared to a more modest selection.

For example, the choices might be 80% stocks and 20% bonds. The fund could be filled with traditional “blue chip” stocks or more aggressive choices. Bonds on the other hand provide a guaranteed return yet the yields on bonds are relatively low. Bonds are usually the “safe haven” for investors to protect funds and not necessarily be used as income. But you won’t find one asset class- real estate. Why?

When you sit down with a financial planner to review your financial plan and goals it’s not very likely your planner will suggest real estate or investing in private notes. Quite frankly it might be because the financial planner doesn’t get any commission or fees by suggesting a mix of real estate in a portfolio or investing in private notes. It might also be simply the financial planner isn’t that familiar with private investing. That said, if real estate is not in your portfolio or you’ve never invested in real estate to any degree, you’re missing out.

Investing in real estate provides solid returns paid monthly all secured by real estate. This security means should the buyers ever default, you’re protected with a filed lien against the property in a first position. Yet such a situation is a rare occurrence, in fact, we’ve never had a project go into default.

How much should you invest in real estate and what percentage of your funds should be allocated to real estate? That’s for you, your family and your financial planner to decide. But going forward, it might be time to shake things up a bit. There are other options out there that can contrtibute to the success of your investment portfolio and get you close to your retirement goals.


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