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

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Sandidge, president of Scottsdale financialfirm , has lost more than $250,00o from his 401(k) since September — more than half its “I just got tired of watching my monegy disappear,” he said. More investorws are pulling money from their individuak retirement accountsand 401(k)s and investingb in alternative assets such as real estate, oil and gas private businesses and precioua metals.
The stock market crashy in 2008 — which saw the Dow Jones Industrial Average sink 32 percenty and the Nasdaq nearly 41 percent cracked millions ofnest eggs, prompting investorsx to trade some of their staker in the equity markets for illiquid either through their employer-offered retirement plans or by establishing self-directec accounts. “People just want more said J.P. Dahdah, president of LLC, which providees retirement plan administration and recordkeeping servicees for individualsand small-business owners who want to invesrt in nontraditional assets.
The Scottsdale firm administers morethan $250 millionj in retirement plan assets, and its client list of 2,500 continues to grow. Under federal law, individuald cannot administer their ownretirement accounts, so approvecd custodians such as Entrust Arizona are in demaned as the stock market remains volatile, despitew gains in the past two months. Entrusf 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 estat is the preferred alternative investment, especially in It has made uneducated investors but its perils have been justas well-publicized.
Skimmingh through unemployment reports and bankruptcyh and foreclosure listings tellsthat story. When the real estats market tanks here, so does the Nevertheless, it remains an attractivre alternative, especially if you have staying Barbara Mackerman can attestto that. In Aprill 2008, she purchased a four-bedroom home in Mesa for $110,000 paid for entirely with cash she pulles fromher IRA. Given Wall Street’d collapse shortly after that investment, Mackermanb likely will turn a nice profigt when the housingmarket recovers. For now, she’s renting out the propertyu for $1,450 a month.
“I think we made the right decisioh at the right said Mackerman, director of financed at Sunrise Health and Hospice in Gilbert. “Imn the long run, we might be further ahea becauseof what’s happened to the stock Time will tell.” Valley companies that offer alternativ investments say business is up, especially since the stock market obliterating millions of retirement plans in a matter of More than $1 million a day is traded at , whichh buys and sells coins, silver, and other precious metals. Senior portfolilo manager Richard Cromwell said the Phoeni x firm has seen IRA contributions and volume triplre in the pastfew years.
“Thisa gives you an opportunity to controloyour investment,” said Cromwell. “ believe self-directed IRAs will be the wave of the Swiss America manages morethan $1 billion in assetsd for more than 40,0009 clients. For decades, adviserxs and investment firms touted the stock markeft as the premier outlet forinvestinb 401(k)s and IRAs, while trusts avoidede the illiquidity of private-sectord investments. But that sentiment is changing in the wake ofWall Street’a historic collapse, which buried some of the nation’se largest financial firms — and countless retirement dreams. Trusts are takinhg a more entrepreneurialposition now.
“People are very quicklgy learning there is risk in all levelsof investing,” said Glen managing partner of HSL Financial Group LLC. The Scottsdaler investment firm manages theHSL Fund, which invest in small, private businesses with provenb models. The private equity fund has more than 20 accredited investorss with morethan $1 million in net “We only invest in businessew we know,” Hinshaw said. “A lot of wealt is still sitting insmall business.” Entrusgt Arizona LLC: Swiss America Trading Co.
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