Self Directed IRAs vs. Conventional Wisdom: Are They At Odds?

When people research Self Directed IRAs, they start to get the sense that it’s completely at odds with conventional wisdom about investing.

But does this really hold up when you do the research, or is it a false choice? If you ask us, there are many different ways of looking at Self Directed IRAs:

Conventional Wisdom: “Keep most of your money in the stock market—over the long haul, it gives you the best returns.”

Self Directed IRAs: “Diversify.”

There are few people who are going to quarrel with the conventional wisdom on this one. The reason the stock market is so popular is because it is one of the best ways for people to get returns. After all, what you see on the public stock market is a swatch of companies that are run by some of the best businesspeople in the world. It’s no wonder that over the long haul, stocks tend to do well and create a stellar rate of return.

But is that all you need to know about investing?

The philosophy of those with Self Directed IRAs says that there’s more to investing for retirement than just diversifying a stock portfolio and waiting until retirement. It says that there’s more out there than just one market, and that placing your eggs in one basket—no matter how great the basket—is not a good idea.

These two concepts can live in harmony. It’s possible to have a lot of money in the market as well as a lot of money on your own, with Self Directed IRAs to protect your other investment stores like real estate.

Conventional Wisdom: “Defer to the advice of the experts.”

Self Directed IRAs: “Listen to yourself as well.”

When you know every little about investing, it’s tempting to defer all of the decisions to someone else. You open an account and listen to a financial planner tell you where your assets should go. You go to a bank and get their recommendations on which kinds of accounts to build up. You go online and ask people to tell you what to do.

And that’s fine. There’s absolutely no reason you shouldn’t listen to experts in order to give yourself a more well-rounded view of what’s available out there.

But that doesn’t mean the ultimate decision should ever be out of your hands. It’s your money, after all—you should be free to decide what to do with it.

That means arming yourself with investment knowledge. Use the experts’ opinions as one source of that knowledge, but keep exploring other ideas as well. Challenge yourself. Think about what really works in the real world, and remember that you might have investment experience in an area like real estate that can be unlocked when you open a Self-Directed IRA. It doesn’t have to be an either/or situation.

If you want to know more about the Self Directed IRAs you’ve heard about here, continue reading and check out many of our posts and guides about this very subject. You can also call us at 828-257-4949 to learn more about Self Directed IRAs. A fresh perspective is always good to help you learn more about the world of retirement investing.