Beware of Adding These Investments to Your Retirement Toolkit
Investors in these nontraditional assets might give up transparency, liquidity, and regulatory oversight.
These are trying times for retired people who are attempting to wring a livable income stream from their investments. Interest rates are about as low as they can go and likely to stay that way for the foreseeable future, making cash and high-quality bonds safe parking places but little more. The wild gyrations of stocks, meanwhile, have clearly telegraphed that anyone with less than a 10-year time horizon should stay away. (We've gotten the message loud and clear, by the way.)
Amid such a challenging environment, it's hard to blame retired investors for looking beyond traditional investments like stocks, bonds, and cash, or the mutual funds and exchange-traded funds that invest in those securities. Many investors, and not just retired folks, have flocked to gold and other precious metals, while others have gravitated toward investment types that are even more arcane--life settlements, distressed real estate investments, and private mortgage investments.