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

firefighting-stringers.blogspot.com
Sandidge, president of Scottsdale financialfirm , has lost more than $250,000 from his 401(k) since Septembere — more than half its savings. “ just got tired of watching mymoneyg disappear,” he said. More investors are pulling money from theid individual retirement accountsand 401(k)s and investin in alternative assets such as real oil and gas refineries, private businesses and precious metals.
The stocj market crash in 2008 which saw the Dow Jonees Industrial Average sink 32 percenft and the Nasdaq nearly 41percent — cracke d millions of nest eggs, prompting investorz to trade some of their stak e in the equity markets for illiquid either through their employer-offered retirement plans or by establishin self-directed accounts. “People just want more choices,” said J.P. president of LLC, which provides retiremenrt plan administration and recordkeeping services for individualsand small-businesse owners who want to invest in nontraditionalp assets.
The Scottsdale firm administers morethan $250 million in retirement plan assets, and its client list of 2,5000 continues to grow. Under federal law, individuals cannoyt administer their ownretirement accounts, so approves custodians such as Entrust Arizona are in demanf as the stock market remains volatile, despite gains in the past two months. Entrust charges a one-time account setup fee of $50, then $250 for every asset held and a $95 fee when a client buys or sellwan asset.
Real estate is the preferrerd alternative investment, especially in It has made uneducatedinvestors millions, but its perilsz have been just as Skimming through unemployment reports and bankruptcyy and foreclosure listings telld that story. When the real estate market tanksw here, so does the economy. Nevertheless, it remainsx an attractive alternative, especially if you have staying power. Barbara Mackerman can attest to that. In April 2008, she purchased a 2,200-square-foot, four-bedroom home in Mesa for $110,000 –– paid for entirelgy with cash she pulled fromher IRA.
Givehn Wall Street’s collapse shortly after that investment, Mackerman likelyh will turn a nice profit when the housinvmarket recovers. For now, she’s renting out the propertyy for $1,450 a month. “I thinok we made the righft decision at the right said Mackerman, director of finance at Sunrise Health and Hospice in “In the long run, we mighyt be further ahead because of what’s happened to the stocmk market. Time will tell.
” Valley companiees that offer alternative investments say businesssis up, especially since the stock market tumbled, obliteratinfg millions of retirement plans in a matter of More than $1 million a day is tradedx at , which buys and sellss coins, gold, silver, and other precious metals. Seniore portfolio manager Richard Cromwell said the Phoenixz firm has seen IRA contributions and volumew triple in the pastfew “This gives you an opportunity to control your investment,” said “I believe self-directed IRAs will be the wave of the Swiss America manages more than $1 billion in assetss for more than 40,000 clients.
For advisers and investment firms toutec the stock market as the premier outlet forinvesting 401(k)s and IRAs, while trusts avoided the illiquidityg of private-sector investments. But that sentiment is changing in the wake ofWall Street’x historic collapse, which buried some of the nation’s largesty financial firms — and countles s retirement dreams. Trusts are taking a more entrepreneuriaklposition now. “People are very quickly learninf there is risk in all levelasof investing,” said Glen Hinshaw, managinfg partner of HSL Financial Group LLC. The Scottsdale investmen t firm manages the HSL which investsin small, private businessess with proven models.
The private equity fund has more than 20 accreditex investors with morethan $1 million in net worth. “Wr only invest in businesses we Hinshaw said. “A lot of wealty is still sitting insmall business.” Entrus Arizona LLC: Swiss America Trading Co.: