Mutual Fund Vs Hedge Fund Vs Real Estate IRA

    

In today's economic roller coaster ride, a significant number of people are starting to look for ways and means to better invest their resources to have greater chances at a secure future. There is a recent surge in the number of individuals looking to put their money in Mutual funds and Hedge funds. Some are also opting for Real Estate IRAs. Let us now discuss the merits of each one.

What exactly is a Mutual Fund? It is an investments company or entity that pools resources from its shareholders to purchase certain monetary vehicles in the form of stocks, bonds, commodities and other investment opportunities which also include real estate. A fund manager, who is a registered investment advisor, will trade the fund's resources  according to a set objective. He will only buy and sell stocks, bonds and other securities in accordance to the objective's parameters. This allows investors certain freedoms seeing as how they are able to pick and choose which mutual funds they want to invest in depending on the company's economic niche. A Hedge Fund on the other hand is similar in the way that it also pools resources from various investors. The similarity ends there however. Whereas a mutual fund has a set investments objective, a hedge fund manager can utilize the company's resources in a wider range of investments. A hedge fund can channel its resources wherever it anticipates a greater gain or a minimal loss. Hedge fund managers usually invest their own money and resources in the company thereby ensuring that their goals and interests are aligned with the rest of the investors. Hedge funds are also known for taking long positions on certain assets that the managers anticipate will most likely increase in value in the future such as real estate. Real estate is one of the few types of assets that is very likely to gain value as time passes. The world's population will only see a continuous increase every year thereby triggering a proportionate rise in demand for housing and commercial properties. It is therefore only natural for investment companies and IRA trust companies to look into this investment opportunity. Let's look at Real Estate IRAs. A resource pool similar to a mutual fund but with management similar to a hedge fund with the added advantages of being an IRA, meaning taxation perks.

Investing in real estate is not a sure guaranty of gain. Sure it yields huge earnings but even prime locations with high commercial values are not assurances of long term profits. Real estate generates huge revenue especially with proper marketing and development. Resorts, housing projects and commercial expansions all generate ever increasing property values. This however also causes the real estate bubble phenomenon which occurs periodically throughout the economic history. The recent financial crisis in the US during 2007 - 2010 is actually a result of a real estate bubble collapse. The continually increasing property costs reaches a point where in the value is already unsustainable. This triggers a downward slide in real estate price levels. This sort of bubble bursts occur every couple of years or so and some economic experts have speculated that they are inevitable.

This then is where we as investors should pick and choose which way to go. Should we go with mutual funds and put our money in short term but controlled investments decided by a registered investment advisor? Are hedge funds the way to go with a fund manager working in line with our own interests since his own money is invested? Or is Real Estate IRA the answer, with its capacity for more administrative freedom by investors with a few tax perks to boot.

Real Estate IRA LLC

MyRealEstateIRA.com would be of good help in setting up your real estate IRA LLC and provide ongoing knowledge, experience and ongoing support for you to reach your retirement goals!

For more information about Real Estate IRA LCC visit

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