You don’t have to be confident in the economy to invest. If you’re smart, you’ll find ways of enhancing your overall portfolio even in the worst of times. But that means you do have to know how to cast a wider net. It means you do have to know how to diversify. And when it comes to your retirement investments, you will have to know how to use Self-Directed IRAs to your advantage.
If you’re starting from a place of no knowledge, it might seem tricky. But it doesn’t take much knowledge before you start to see how Self-Directed IRAs might be able to guide you to greener pastures when it comes to the economy “tanking.” Let’s take a look at some of the ways you can continue to succeed even when the economic outlook is very bad, as we saw it was in 2008.
First Things First: Use Self-Directed IRAs to Create a Secure Portfolio
You can’t weather a good storm unless you first spend some time constructing a strong shelter.
This means that you’ll want to spend some time considering how you want your portfolio to look before you make a majority of your investments. And this also means that you’ll want to plan for possibilities like a massive stock market crash.
For most people, this means diversification. That’s where Self-Directed IRAs come in. With a properly diversified portfolio, you can make sure that your assets aren’t completely tied up in the stock market. This gives you a broader range of assets to count on: assets like precious metals and real estate. When the stock market goes down, you can still continue to charge the same amount of rent, for example, and this gives you leeway when it comes to your other holdings.
So take some time before you start investing to think about how you want your portfolio to look. Many investment professionals will tell you to diversify in small to large-cap stocks. But others will go a step further and tell you that you need to diversify across asset classes, too. That’s where Self-Directed IRAs come in, allowing you to determine your own financial future and construct a portfolio you can be happy with, even in times of economic uncertainty.
Don’t Let a Bear Market Scare You Off
If you have a good plan in place, a market crash doesn’t have to startle you. You should be prepared for it—in fact, you should actually plan on it coming once every decade or so. This will mentally prepare you for it, because the problem with most big market crashes is that many investors simply let the negativity get to them. They get pessimistic, sell off their stocks, and then watch as the economy slowly recovers. They’re not really ahead, even though they thought that by taking decisive action, they were doing the right thing.
Many private investors do absolutely fine by continuing to contribute to their retirement in times of stock tumbles and economic uncertainty. You might have a down year, overall, but you’ll likely find that by continuing to fund your effective and diversified strategy, you’ll be in a great position to take full advantage of any recover that happens in the following years.
If you’re interested in using Self-Directed IRAs to ensure that you’re ready to handle the next financial storm, maybe it’s time to take action. Continue browsing AmericanIRA.com for more tidbits or call us at 828-257-4949 to get started learning how Self-Directed IRAs can be put to use in a diversified portfolio that offers you peace of mind.