Real Estate A "No Brainer"
This Yahoo site tells us, "Small-biz entrepreneurs are discovering that they can (invest directly in real estate) through their so-called solo 401(k) plans. The tactic has been fueled by real estate's hot returns in recent years."
A good idea? Not according to the CSMonitor. "Richard Thaler has made a career of cataloguing the blunders of amateur investors. Mr. Thaler ticks off the mistakes: People tend to be overconfident in their ability to pick stocks. They're unwilling to admit a mistake and make matters worse by holding on to losers. They put more money in the market as it nears its peak. When a market is rising, they think it will keep rising."
"Don't get us started on real estate. Economists across America warn that housing prices are a bubble about to go splat. But the Univ. of Michigan recently found a growing confidence in the promise of ever-rising property values. According to its consumer survey, 22 percent of households think that real estate is now a great investment, double the share of 15 months earlier."
There is even a tax advantage to borrowing part of the property in the 401k. "'Borrowing speeds your growth using someone else's money,' Anderson says. 'It's a no-brainer.'"