Guidant Financial Group Blog

Bush signed the housing bill today (see Bush Signs Sweeping Housing Bill). Good!

But the Treasury Office estimates that about 35 percent of the loans that the new bill will help to refinance will still end up in trouble. Bad!

The new bill encompasses several initiatives aimed at bailing out the housing market. The first is help for those homeowners facing foreclosure. The bill will create government-insured loans with more affordable rates.

The second initiative is the bail-out for our friends Freddie and Fannie. As outlined in our post on 07.22.08, the government will extend a large line of credit to the two mortgage giants in hopes of heading off the collapse of the companies, which own half of the U.S.’s mortgages.

The last major initiative in the bill includes money for local governments to purchase and refurbish foreclosed properties.

There is a lot of debate as to whether this housing bill will serve the purpose for which it was created: keeping Americans in their homes. Many experts have declared this the largest housing intervention since the New Deal. The creation of the FHA and Fannie Mae as a part of the New Deal, however, was a result of outside influences – whereas the bill that was signed today was the result of the lenders’ own mismanagement.

What a lot of people are wondering now is: Why are 35 percent of homeowners still going to lose their homes, when the private shareholders of Fannie Mae and Freddie Mac stand to profit from the government bailout?

Any thoughts?

The hard reality of the flailing economy has hit Seattle where it really hurts: Starbucks has let go almost 200 people at their headquarters and has announced more than 1,000 job losses nationwide (see Latest Job Cuts, Store Closures May Be Last Jolt for Starbucks).

If nothing else is a sign that times have changed, this is. As Seattleites, we often associate care-free, cash-rich days with multiple stops at the corner ‘Bux (local lingo for Starbucks).

But now, just like you, we are leaving our cars in their parking spaces during our breaks and we are filling the company coffee pot more often (and transferring our dollars to another local company, Costco). Unfortunately, all this tightening of drawstrings multiplied by millions of other consumers across the country has translated to job losses at Starbucks.

We look forward to a day when we again can purchase $4 cups of coffee with reckless abandon. Ahh, the good old days.

On July 15, 2008, the stock market went below 11,000 – back to where we were two years ago. The real estate market has seen significant challenges as well. How does someone make money in today’s economy? Journalist Frank McKinney Hubbard once said, “The only way to double your money is to fold it over once and put it in your pocket.” Where are the opportunities when there is uncertainty about market direction, real estate prices, the war – even inflation?

Although we own no crystal ball, Guidant tends to see trends develop before the general public. Last month Guidant Financial Group released statistics that stated a 131% increase in private loans originated through self-directed IRAs. That is a fascinating statistic because it shows how self-directed IRA investors are adapting to the ever-changing economic climate.

In addition to private lending, Guidant clients who responded to the survey also said there was an increase in alternative assets such as real estate (up 24% from 2005) and tax liens (up 341% for the same period). IRAs holding tax liens increased by a significant percentage: from 1.7% to 7.5%. But, although the percentage change was dramatic, the total number of self-directed investors actually pursuing this investment is still relatively small.

The trends we have seen with our 5,000+ clients prove that the flexibility of a self-directed IRA provides the IRA holder with the ability to diversify into unique investments that may not be as volatile as the stock market . . . or that are at least secured against real property. Tax liens, loans and real property are all interesting ways to generate wealth through a retirement plan.

Isn’t it funny how often people, trends and Mother Nature seem to swing from one extreme to another? It appears that even big banks aren’t immune. Exhibit A: Their knee-jerk reaction to swing to the opposite extreme when their overindulgence and that of their patrons have created such financial turmoil.

The New York Times reported today that banks have decreased loans to small businesses by 3 percent over the last year (see Worried Banks Sharply Reduce Business Loans). This severe drop in commercial/industrial bank loans and commercial paper is really no surprise when you consider how much trouble banks got themselves into by making loans to just about anyone with a pulse and a pocketbook. But like a car trying to avoid a collision by overcorrecting and ending up in the ditch on the opposite side of the road, these institutions may be setting in motion a wipe-out of another sort.

Unfortunately, when the U.S. economy and American small business is directly affected by even the slightest change in business practices, the potential problems created by institutions overreacting to a big “Ooops!” can be major.

A large portion of the American work force depends on small business. At a time when jobs are hard to find and extra cash is scarce, the idea that small businesses may not be able to access capital for expansion is pretty scary. The Times article seems to allude to banks reducing loans to even profitable and highly qualified businesses.

For those who use 401(k) small business financing, having more equity in their business than their peers may be a decisive advantage when looking for additional cash.
Our hope is that banks will find a happy medium soon. They’ve already messed things up with the mortgage crisis; we can ill-afford an even bigger mess on our hands.

Two reports that were released today confirm that the housing market is continuing its march downhill.

The Census Bureau reported that new home sales fell 0.6% in June (see New Home Sales Stronger than Expected). While the drop wasn’t as pronounced as economists had predicted, all the “it’s not as bad as we thought it would be” comments are a bit too reminiscent of that old joke: “But other than that, Mrs. Lincoln, how did you enjoy the play?”

We’re trying to see the glass as half-full. Really we are.

Additionally, RealtyTrac announced today that foreclosures are up 14% from last quarter – and 120% from last year (see Foreclosure Filings Up 120%). RealtyTrac’s data also showed that bank repossessions were up for the year. Some experts believe this is a sign that we have finally hit rock-bottom, but still others think that homeowners are simply running out of options.

There is a housing bill on its way, which should help alleviate some of this pain. For those, however, who think that “buy low, sell high” translates to housing investments just as much as it does to securities, some analysts may suggest that you pick this low hanging fruit sooner rather than later.

Hmmm. Well, maybe that glass could be half-full, after all!

True – the Employee Retirement Income Security Act (ERISA) of 1974 was created to move the responsibility of saving for retirement from the employer to the employee; but, when, 35 years later, employers who have promised their employees a pension decide to freeze their defined benefit plans, we wonder whether ERISA did enough to protect the interests of pension participants.

An article by the Associated Press today announced that nearly half of employers with pension plans have frozen these accounts (see About Half of Pension Sponsors Have Frozen Plans). The finding comes from the Government Accountability Office (GOA), which surveyed 471 single-employer defined benefit plan (DBP) sponsors.

The sad reality of these freezes is that most plans will never be unfrozen, leaving employees with stunted pensions. While most employers who freeze plans do put 401(k)s or other defined contribution plans (DCPs) in place, employees who have worked for the same company for several years, expecting a guaranteed pension for their long-term loyalty, will now have to start contributing to a new plan to make up for lost future income.

This transition can be difficult for multiple reasons. First, employees will have to adjust to lost immediate income (a percentage of their paycheck will now have to be contributed to a DCP). Secondly, for long-term employees, they have lost out on several years of compounded interest – leaving them at a decided disadvantage to their younger counterparts who still have several years in which to grow their supplemental accounts.

While ERISA served many great purposes, the question remains as to why congress failed to put guidelines in place that regulate the transition from DBPs to DCPs. Even though ERISA added more savings options for employees and employers, it did not require transition to DCPs nor did it put provisions in place that require the continuation of existing pension plans should they choose to keep their DBPs. Now employees are left holding the proverbial bag.

"When companies freeze plans, older employees often experience huge benefit losses and younger workers are left to save for themselves," Karen Friedman, policy director for the Pension Rights Center, told the Associated Press. "Congress needs to step up to the plate to develop solutions that encourage companies to preserve their employer-paid, guaranteed pension plans, not freeze them."

At least participants in frozen pension plans have options. For those looking to grow their retirement plans quickly in ways that help them feel more secure, the best option may be the acquiring of a self-directed IRA that lets them invest in assets they can control.

The Congressional Budget Office (CBO) released estimates today for the governmental bail-out of Fannie Mae and Freddie Mac. Their guestimation? $25 billion (see Cost of Fannie, Freddie Rescue - $25B).

Ouch.

Fannie and Freddie have repeatedly reported that they have more than adequate capital to continue operating as usual. Freddie Mac also noted that their June 30 results will show that the institution has a “much greater surplus” than the required minimum (see Government Steps In To Rescue Fannie, Freddie).

So why the bailout?

According to an NPR article, the driving force behind the rescue is investors’ peace of mind. In his article, reporter Joshua Brockman writes:

“Right now, it's more of an effort to battle the markets' lack of confidence. Opening the discount window to Fannie and Freddie ‘instills confidence in investors, so investors will continue to fund Fannie and Freddie,’ says Frederick Cannon, chief equity strategist for Keefe, Bruyette & Woods. ‘I don't see them using the [money].’”

Hmmm.

So if they’re not going to be using the money, is the actual cost of the bailout a moot point? To confuse the issue even more: The CBO says that there is a greater than 50% chance that Fannie and Freddie won’t need the money. Yet, it also says that there is a 5% chance the bill could run as high as $100 billion.

Huh?

We suppose it all comes down to analyzing the best-case and worst-case scenarios.

Best-case? Fannie and Freddie don’t need the credit. According to some U.K. publications, the panic in the U.S. financial markets is simply begetting more panic (see Fannie, Freddie and the ‘Economics of Fear’) and the government needs to step in to calm investors’ nerves in order to stimulate investments in the secondary markets.

Worst-case? According to a St. Louis-Dispatch Editorial, “If the mortgage cousins were to fail, money for new mortgages would dry up. Home prices, already falling, would collapse. More homeowners would default. The homebuilding industry would crater.” (See PRO-CON: Should the Government Rescue Fannie Mae and Freddie Mac? YES.)

Yikes.

Whatever may come to pass, $25 billion seems like a lot of money for some peace-of-mind; but, should the mortgage giants collapse, it may be a small price to pay to save the (according to some reports) $12 trillion mortgage market.

What are your thoughts?

Thanks to the slow economy and the upside-down housing market, more homeowners are looking to auctioneers to unload properties fast.

Mind you, these are not foreclosures. These are homes that in a regular market would sell for the asking price, or at least close-to it, in a matter of days or weeks. But … we are not in a regular market.

According to the Associated Press, revenues from residential real estate auctions have increased 5% in the last year and nearly 47% since 2003 (see Home Auctions Surge 47 Percent Since 2003).

For a self-directed IRA investor, this increase in homes sold at auction can be great news. Residential homes sold in this manner tend to sell at 35-40% less than fair market value. Sometimes more. Additionally, as opposed to homes in foreclosure, properties sold by the owner at auction are typically in better condition.

For homeowners looking to sell fast, auctions offer a mixed bag of advantages and disadvantages. While the homes are sold quickly – in as little as 30 days – many sellers end up with less than what they originally paid for the home.

For self-directed IRA investors considering purchasing homes at auction, be aware that buyers are responsible for an auctioneer’s fee (between 6-10% of sale price), so you will want to calculate this in when determining your potential return on investment (ROI).

We had to share this with you.

The picture you see here is of one of our senior consultants, Doug Miller, who bet one of his buddies on the Ultimate Fighting Championship and, well, as you can see, he lost.

Oddly enough, Doug received a lot of sympathy from passers-by – and even made $2. One gentleman actually took out his cell phone and proceeded to take a video of Doug, which we hear will end up on YouTube one of these days. If we find it, we’ll let you know.

Judging by the response Doug got from his parade down NE 20th Street, we assume that people find the volatility in the stock market somewhat ridiculous – almost funny. But, we also think we saw some fear in the eyes of the passers by.

At least we now know that should things really go south – we can always stand on the corner in a business suit with a funny sign and wait for a video of our actions to go viral, which will make us the next big reality TV star.

Or not.

In our posting on Friday (7.11.08) we mentioned that the significant drop in the Dow and S. & P. was attributed to the government’s statement against coming to the aid Fannie Mae and Freddie Mac.

Things have since changed.

The Dow and the S. & P. are up (thank goodness) and the government has decided to step in (see U.S. Moves to Support Fannie Mae, Freddie Mac). Surprised? We aren’t.

We decided that this may be a great time for a U.S. history lesson.

Did you know that Fannie Mae is short for the Federal National Mortgage Association and that Freddie Mac is short for the Federal Home Loan Mortgage Corporation?

Did you know that Fannie Mae was started as part of the New Deal in 1938 by Franklin D. Roosevelt as a government agency? Did you know that it is no longer a government-owned agency?

Although Fannie Mae was privatized in 1968 and Freddie Mac was created in 1970 to create competition in the industry, both remain Government Sponsored Entities (GSEs), which enable the companies to trade their debt issues on the secondary market.

Both organizations are shareholder-owned; but even before congress stepped in this week to intervene, Fannie and Freddie shared some very unusual benefits from the government.

According to Peter Wilby, a reporter with the decidedly socialist UK magazine the New Statesman, Fannie Mae and Freddie Mac’s GSE status affords them several liberties.

“Their GSE status carries privileges in return for minimal regulation,” Wilby writes (see Fannie and Freddie Go Broke). “They don't pay taxes; they can borrow from the U.S. Treasury; they don't have to keep as much cash in hand as conventional banks. Though all the debt they issue comes with the disclaimer ‘not guaranteed by the United States,’ everyone assumed that, if necessary, the government would bail them out (they were right). That's why Fannie and Freddie could borrow cheaply. They now control half the U.S. secondary mortgage market.”

Although Wilby’s stance is unquestionably biased, his statements do lend credence to the argument that, should the government intervene in the collapse of Fannie Mae and Freddie Mac (which already experienced special status from the U.S. powers-that-be), other banking institutions may come to rely on the government for bail-out, at the American tax-payer’s expense.

We’re not suggesting that you trade in a professional business plan for a guide to balancing your chakras, but there is quite a lot to be said about the “mind-over-matter” mentality.

A new article on Entrepreneur.com touts the benefits of visualizing your success 10 minutes a day in order to move forward in your entrepreneurial goals (see Make ‘Someday’ Happen Today).

The article suggests that you do such things as write out a list of all the things you have been thinking of doing but haven’t done, select one of those things, and then spend 10 minutes focusing on that one thing you have chosen, imagining that you have successfully achieved it.

The article goes on to explain how this exercise helps people achieve the energy and excitement they need to move forward with their dreams.

Although there is also a lot of work involved in starting or purchasing your own business, getting mentally prepared for the task at hand is a great way to start the process.

And, for even more confidence in moving forward with your dream of business ownership, use Guidant’s 401(k) small business financing solution to take some of the pressure off of monthly loan payments! :)

It’s a wise person who knows their limitations. This might explain why nearly half of new business owners working with Guidant seek professional help with their buying decisions. According to a survey of our clients using retirement funds to finance their new business, 46 percent of them use consultants or brokers in the search for their new enterprise.

We know that the majority of our clients are highly educated, successful people. It’s unlikely these folks have gotten to where they are without recognizing the value of input from others – especially when making a decision as important as buying a small business or franchise. A good consultant or broker knows the industry intimately, can provide multiple listings (with “insider” information), and can offer expert advice on the current market, fair pricing, competition, pitfalls and benefits.

Smart business people also recognize the value in the personality-and-interests questionnaires many consultants use in helping their clients focus in on the franchise or business opportunities best suited for them. As much as we all like to think we know ourselves inside and out, some of these in-depth questionnaires can still reveal new information and, sometimes, even a few surprises!

I’m certainly not suggesting that those considering the purchase of a business rely solely on consultants to do their legwork for them. Your own due diligence should include some heavy duty website searches and exploration of various organizations offering assistance. In fact, our Guidant survey also found that 19.7 percent of entrepreneurs find their business online and 9.7 percent find their opportunity via a franchising organization or franchisor directly.

That said, however . . . ultimately, personal relationships rule. Many prospective business owners don’t want to rely on websites alone to find the opportunity of their dreams. After all, websites don’t get to know your unique skills and personality, and they don’t listen to your concerns, frustrations and desires. Consultants do.

Despite the weak labor market, jobless claims have dropped by 58,000 for the week ending July 5 (see Jobless Claims Dip but Labor Market Still Weak).

Wait, make that no.

According to government analysts, jobless claims actually increased by 30,000.

Huh? Which is it?

Apparently, it’s both. The official, seasonally adjusted number of jobless claims fell by 58,000. However, a government analyst cautioned that “The decline was exaggerated because of adjustment problems related to temporary shutdowns at auto plants for retooling new assembly lines. The unadjusted, or actual raw figures, showed an increase of 30,000 claims for last week.”

Is anyone else frustrated with the lack of solid data on how exactly our economy is doing? Just last month we were trying to figure out whether or not we were seeing inflation (see blog post on 07.13.08).

What we can say is that people are feeling the crunch. Obviously, people are getting laid off, prices are rising and the housing and lending industries are crumbling.

However, with all this doom and gloom there may be something you can do – like take your future into your own hands. For those of you who were laid off, why not consider opening your own business? For those of you getting hammered by the stock market, why not consider placing some of your funds in alternative assets?

There are always options out there. With Guidant’s 401(k) small business financing and self-directed IRA services, you should know that there are alternatives to being at the mercy of factors outside your control.

Being a business owner may not be right for you, and a self-directed IRA may be more than you need. But at least thinking about alternatives may lead you to something that could actually brighten your financial future.

For the first time in two years, the Dow dropped below 11,000 points today (see Dow Below 11,000 For First Time in Two Years). Oops.

And who do we have to blame? The financial markets, of course!

Fannie Mae and Freddie Mac are supposedly to blame for today’s high losses. The mass drop in the mortgage institutions’ stocks stems from the government’s announcement that the companies will continue operating as usual (without government intervention), despite the risk of collapse for the two companies.

It is in moments like this that we truly wonder what makes the stock market go up and down. Is it speculation? Actual valuations of the companies people are investing in? What is it?

A large number of our self-directed IRA clients still invest in the stock market. The ability to diversify their dollars into both the securities market and more non-traditional markets (like real estate) within the same IRA account definitely helps to lessen the blow of a “bear” attack like this.

What we would like to know is: Why do you invest in the stock market? What do you think drives the market up and down? What is keeping you from putting some of your retirement dollars into other assets?

Well, fun for us. Not for the celebrities listed. We’re talking about the Forbes.com list of celebrity foreclosures (see Celebrity Foreclosures).

There is obviously nothing funny about people losing their homes. But (you knew that “but” was coming!) . . . hearing about the rich and the famous getting swindled by the same mortgage companies swindling us “little people,” helps make us feel like the world is at least somewhat fair in doling out its misfortunes.

So, who topped the list?

Ed McMahon, of course, plus Jose Conseco, Michael Jackson, Evander Holyfield and Courtney Love.

Fortunately, almost all of these celebrities were able to save their homes. That makes us feel a little better about being gossip-mongers!

Ugh.

We think we could probably sum up our feelings on the official bear market in that one word; however, some commentary might be appropriate during this time of grief .

As we are sure many of you have heard, today the S. & P. 500 entered its first official bear market since 2002 (see S. & P. 500 Enters Bear Market as Stocks Plunge).

Ugh . . . a thousand times over.

Not to be outdone, the Dow Jones made its mark by falling 236.77 points, landing at 11,147.44. For those of you who are counting, a closing at 11,147.44 makes it the lowest close of the year.

Remember when the Dow topped 14,000? Believe it or not, that was almost exactly a year ago.

Hurt too much to remember? It does for us too.

This is one of those times when we feel really good about what we do. Thanks to Guidant’s self-directed IRA services, there are people out there who are not hurting because of the 3,000 point drop in the market. There are clients of ours who have been able to invest their retirement funds in other assets – like real estate, tax liens, and loan notes – to cushion the blow when something like this pops up (or down).

Ready to get off the rollercoaster? One year is a long time to ride just one attraction. Mix it up a little – call us.

The tables have turned. Remember when we were saving for our kids’ college education? Well, now we are saving for their retirement.

Gosh, do parents have to do everything?

Unfortunately, in these (and future) economic times, we may have to. The fact of the matter is that there is no guarantee that social security will be around when our children and our grandchildren are ready to retire. Further, there is no guarantee that the securities market will yield the same rate of return for future generations as it has for past ones.

It is no wonder that parents and grandparents are now considering putting aside funds for their children and grandchildren’s retirements, just as they would for their college education.

An article on NuWireInvestor.com last month introduced a revolutionary savings tool called the KissTrust (see KissTrust: Give the Gift of Savings). From what we can gather, the KissTrust is like a savings bond on steroids, which touts the ability to grow to as much as $1.3 million by the time the beneficiary reaches age 65.

Like other savings vehicles, the KissTrust relies on the movement of the securities market for any returns. Yet if the trust is opened at the time of the beneficiary’s birth, it potentially has as much as 65 years to mature – that’s 65 years of compounded interest. You do the math.

Furthermore, unlike other trusts and annuities, the KissTrust can be designed with various provisions in place. This way, the beneficiary cannot access the funds until retirement age or until he/she meets whichever provisions the donor has established (i.e., to use the funds to pay for college or the purchase of a first home).

Although we are sure there are nuances to this kind of account that are not self-evident on the website or in the article, the idea is a novel one. And, on the surface, it sure seems like a good one!

For more information on other savings vehicles for children, see our June 17 blog, Raise Financially Savvy Kids.

Someone posted a very interesting comment to our Guidant in TheStreet.com posting. This reader noted that, while Entrust has more than 50,000 clients, they have rolled only $3 billion or so in assets. Guidant, on the other hand, has only 5,000 clients (if you can say “only”), but has rolled more than $1.1 billion in assets. This means that Guidant clients are rolling, on average, more than $200,000 into their self-directed IRA accounts – whereas Entrust clients are rolling around $60,000 on average.

The reasons behind this vast difference are simple: ease of investment and fewer fees. Guidant’s truly self-directed IRA LLC includes checkbook control. Why does this matter?

Let us tell you.

Checkbook control not only means that you will be able to write checks instantly from your self-directed IRA for any investment, but it means that there is no custodian involved in your day-to-day transactions. What this boils down to is lower fees.

Because a custodian is not involved in your daily investments, Guidant does not charge you transaction fees. Additionally, Guidant does not charge asset-based fees. We couldn’t care less how much money you roll to your self-directed IRA, as long as you believe that this is the best way for you to invest your retirement funds.

Now, if you had $200,000 in your IRA, would you want to put your money in an account that would charge you a percentage of your account value as a maintenance fee? Probably not.

Also, if you had $200,000 in your IRA, you would probably be more likely to explore multiple investment options. Would you want to put your money in an account where you would be charged for every transaction you make? Probably not.

When broken down, it’s pretty easy to see why people with larger accounts can recognize the benefits of working with a company like Guidant.

Guidant charges a flat, up-front fee for its services, which ends up costing less than the accumulated transactions and other fees active investors would pay over time to other providers. That being said, however, it doesn’t make sense for investors who are just getting started with an IRA or who are limiting their hands-on investments to only a few per year to choose Guidant’s one-time fee structure. Guidant will be the first to say that not every investor should have a Guidant self-directed IRA.

Not sure if a self-directed IRA LLC with checkbook control is right for you? Give us a call.

One website indicated that if I "sweep the floors" in the rental house owned by my self-directed IRA, then I might be violating IRS rules by making an "unreported contribution." I realize that this was an exaggerated example, but is there a limit on something like this? For example, let's say I buy a rental property and then remodel it myself. Even though I am not paying myself any money, I am saving thousands of dollars – does this qualify as an unreported contribution?

-- Gary

The IRS code states that your IRA cannot benefit from you, personally, as the IRA owner. This means that you cannot perform any task on a piece of property owned by your self-directed IRA that would add capital value to the investment.

Although some sites tend to go a bit overboard, the main thing you have to ask yourself is: Is my work adding value to the property? For example, if you were to sweep the floors (as in your original question), you would not be adding any capital value to the property. If you were to put in a new carpet, however, you would be adding value to the property.

So, from this example, you can see that you will not be able to personally remodel a home that is owned by your IRA. You can perform minor maintenance and upkeep (i.e., mowing the lawn, replacing a light bulb); however, you will not be able to perform more substantial tasks.

If you have any questions about whether or not the task you are about to perform could be construed as a prohibited transaction, feel free to call one of our senior consultants for more information.


Do you have an Ask the Expert question? Email your questions to asktheexpert@guidantfinancial.com.

Guidant’s offices are closed today in celebration of Independence Day. We hope you have a fun and safe holiday!

"You have to love a nation that celebrates its independence every July 4, not with a parade of guns, tanks, and soldiers who file by the White House in a show of strength and muscle, but with family picnics where kids throw Frisbees, the potato salad gets iffy, and the flies die from happiness. You may think you have overeaten, but it is patriotism. "

--Erma Bombeck

There was an in-depth conversation going on in the Guidant break room yesterday about whether or not employees wanted to know the date of their death. The general consensus -- aside from the fact that we should have more clients on television to distract us from our dark thoughts -- was a resounding “no.”

Although knowing that something terrible is about to happen can feel almost as bad as the terrible thing itself, sometimes knowing what “bad” thing is on the horizon can actually be a “good” thing. This can definitely be said of the forecasted housing prices posted by CNNMoney (see Where Home Prices are Headed Next).

Up until we saw this article, many of us were under the impression that the Seattle housing market was nearly immune to the housing crisis. But even though it’s hard for us to face the disappointing realization that the Seattle market is predicted to decline a full 9% in the next year, these predicted changes may be a useful cheat sheet for some investors, even some of us right here at Guidant.

Self-directed IRA holders interested in investing in real estate may be able to take advantage of current low housing costs and predicted declines in some areas (like Guidant’s own hometown!). Additionally, for those who are waiting to build their IRA through smaller investments and then move toward real property, the regions with the biggest decreases in home prices may boast the best investment deals in the next couple of years. In order to be ready when your IRA is, it’s never too early to start looking.

All this being said, one thing the CNNMoney article doesn’t do is tell readers how the data was compiled or the exact changes calculated. It should go without saying that before any investor moves forward with an investment, he or she should consult a qualified advisor (not a crystal ball) and do plenty of due diligence.

The same would be said for any mumbo-jumbo that predicts the number of mates you’ll have, the names of future children, or, yes, even the date of your death: don’t believe it until you know how that consensus was reached ... unless the vehicle of the latter prediction was a 300-lb. ex-linebacker named Guido – then we suggest you take it very, very seriously.