4 Smart Investments beyond the Stock Market

As major stock market indexes continue to climb, so are concerns on the “fear market” known as the VIX—the CBOE S&P 500 Options Volatility Index—says Dean Anastos, founder of Apollo Financial Group.

“…in general, there seems to be too much complacency among investors, and there are hints here and there that the market is not as bullish as many have supposed,” he said.

Market advances have been thin in volume while declines have been heavier, according to Anastos, who specializes in real estate, computer programming, and trading data communications equipment.

“Now may be a really good time to look elsewhere for smart investments,” added his business partner Ricky Brava.

Anastos and Brava review some of those options.

Real estate is still growing

No area was hit harder by the recession than real estate. However, since then the getting has been good for prospective buyers looking for a profit. Yet many remain gun shy due to the hard lessons of 2008-2009.

Meanwhile, the housing recovery continues as prices are getting back to where they once were. In many markets, buying is still cheaper than renting, but this is not true everywhere.

“Ultimately, it depends on the area, the loan and how long you may be looking to live on the property—or, if you want to rent a property out, which continues to be very lucrative today,” Anastos said.

Banks have plenty of distressed debt; consider a deal

“We buy distressed debt bank portfolios that aren’t generating cash for the bank and work with the families in the homes to refinance at affordable rates,” says Brava. “If we can’t work it out with the owner, the property gets a second chance, rather than sitting vacant, when we sell the loans as non-performing first or second lien bank notes.”

Conduct a thorough title search of the property to reveal any liens. Check with the county to ascertain what, if any, outstanding property taxes are due. Contact a local real estate agent to get an estimation on the property and its as-is resale value.

Keep in mind tax-advantaged investments

Tax-advantaged investments can include real estate partnerships, oil and gas partnerships, and suitability, which refers to how appropriate an investment may or may not be to an investor.

Two of the most common types of real estate partnerships, for example, are low-income housing and historic rehabilitation. The federal government grants tax credits to those who construct or rehabilitate low-income housing or who invest in the rehabilitation or preservation of historic structures.

Pay attention to possible changes to Roth IRAs

This is still a good investment option for retirement, even though significant changes have been proposed by the White House. Your allotted money goes into a Roth after it’s already been taxed, but earnings aren’t taxed.

Unlike traditional IRAs and 401(k)s, Roth owners currently don’t have to take annual distributions after turning 70-and-a-half, which means the money has even more years to grow if the owner doesn’t need it. And once the Roth owner dies, the beneficiary inherits the money tax-free.