Fix These Long-Term Investment Quandaries with Self-Directed IRAs
If investments both inside and outside Self-Directed IRAs were completely predictable, everyone would put aside as much money as they could every month, never worry about their future, and retire rich.
Unfortunately, both you and we know that for most people, investments don’t work that way.
So what do people do when faced with the very real risks, obstacles, and investment quandaries that plague our retirement accounts? They go the “traditional” route, if only because that’s what everyone else is doing. But simply making one smart, stable decision isn’t necessarily going to lead to long-term investment success. Making a series of smart, stable decisions will.
So how do you make those decisions in order to curtail the common problems that people face when making retirement investments? We thought you’d never ask. Let’s take a look at how Self-Directed IRAs can provide direct solutions to the kinds of issues that worry investors like yourself:
Hedging Against Inflation
Whatever you do, you want your money to beat inflation. Inflation, of course, is simply the de-valuing of a currency over time. What one buck bought you today, it probably won’t buy you tomorrow. The key to understanding what kind of problem inflation can represent is the “money in your backyard example”: imagine that you took a thousand dollars in cash, locked it in a safe, and buried the safe in your backyard. Over time, the money would inflate…and your “stable investment” will have actually lost value simply by sitting there.
Investing in the stock market is one of the most common ways to beat inflation, and indeed, it’s what most people do. But there are other hedges available to your retirement savings that only a Self-Directed IRA can unlock, including:
- Real estate investments. Unlike currency, there’s only a finite amount of real estate in the world. Rarely will real estate depreciate over long-term periods, depending on market conditions.
- Precious metals. Precious metals represent one of the most popular hedges against inflation, as well as one of the most popular hedges against economic strife. When a currency devalues, it’s often the precious metals that go up in cost.
- Private investments. Much like investing in the stock market, there are a lot of opportunities for growth and expansion in private investments that far exceed inflation.
True Portfolio Diversification
You hear it again and again. “Diversify your portfolio! Diversify!” The problem is, many of the same people telling you to diversify your portfolio are the ones telling you to put all of your money in the stock market.
We have nothing against the stock market for consistent, long-term results…but what ever happened to the security of diversification? The stock market is just as vulnerable to collapse and ebbs and flows as any other type of investment! If you want true diversification, you’ll have to diversify your investment types as well.
Many of the hedges against inflation you just read about are ways to diversify your money. Having some money set aside in real estate investments and in precious metals will help you retain your wealth in the event of a sudden stock market crash, for example. But the advantages of the Self-Directed IRA include one simple fact: you are almost limitless in your ability to diversify your investments.
Private IRA lending, private stocks, tax liens, and other investments can be available to you through a Self-Directed IRA, giving you all of the advantages of a retirement investment portfolio but without the shackles of a traditional IRA. There are some limits, to be sure, including purchasing life insurance through your IRA, but here at AmericanIRA.com, we take good care to comply with all IRS regulations and reporting rules.
If you want your investment portfolio to be stronger against inflation and well-diversified, be sure to contact us at 866-7500-IRA(472).
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