Male 1: I think you know conventionally the average American person who invest some of their money—probably the average person doesn’t really know exactly what to do and so what they end up is just putting money into a fund to where, you know as—puts it. The less you know, the more you need to diversify so he says, “Well, I don’t need to diversify because I know what I’m doing but if you don’t know what you’re doing, you need to diversify because you’re going to be putting money into a lot of things you don’t understand. And when bad things happen, you want them to be out way but good things happen with other things that you don’t understand.
How would you compare self directed IRA or 401k investing as all about taking control and you making the decisions in directing investments and the things that you think are going to do better than whatever another fund is going to do. And how would you compare the average person’s ability to get themselves to a point to where they really understand what they are doing in the stock market versus what they really understand what they’re doing in say real estate.
Male 2: Good point. I think you should invest in things that you know and like I said if you don’t know the stock market, you should give that money to a money manager usually a mutual fund or an index fund. We have lots of discussions about diversification. We feel people should be well diversified. Where I think in self directed IRA, it really works for people is when they can spot lack of better term kind of inefficient and opportunistic situations.
So, for example if you knew your neighbor unfortunately have to go into a nursing home and they needed money immediately for that person in the nursing home needs, you might go and make an offer for that property before it went on the market. And that’s a great way to capitalize. I see many opportunities like that. The people can get in and buy friends, family, got to be careful with family a little bit but even in your neighborhood. You know who knows your own neighborhood better than yourself that you drive by everyday and you might see home —for sale but they don’t sell or you might know neighbors that have to move and you might be able to get in there and buy their property before they actually lease it for the general public—so, if you can be opportunistic I think the controlling your IRA is great way for people to diversify.
Again, you need some exposure to the public securities market and on the stock market overtime as generally has gone up, has trended up. But again most people, I don’t believe they have the sophistication level to understand balance sheets and company activity in industries and where—so that money and properties are better left obviously to professionals and the mutual fund and exchange the world. But if you know opportunities and you’re opportunistic, there is great opportunities for you with yourself direct IRA.
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