Top Questions for People Interested in Self-Directed IRA Investing for Private Stocks

How to Trade Stocks Within a Self-Directed IRA

Most investors use a Self-Directed IRA because they want to invest in alternative asset classes. For example, investors can hold real estate within an IRA, they can hold gold or silver, and they can even hold tax liens and private notes. But what if they want to trade a few stocks, too? Is it possible? Let’s look at the rules in charge of Self-Directed IRAs:

Can a Self-Directed IRA Have a Brokerage Account for the Purchase of Stocks?

The short answer: yes. However, there may be some limitations that do not typically apply to someone trading stocks in a taxable account; for example, do not expect to use leverage within your Self-Directed IRA.

The primary goal of many investors with a Self-Directed IRA is to use alternative investments. But it’s not necessarily a goal that all IRA investors share. In some cases, they may simply prefer to maintain more control over their retirement investments; that can still include more mainstream asset classes such as stocks and bonds.

The Pros and Cons of Buying Stocks in a Self-Directed IRA

Why would an investor want to buy stocks within a Self-Directed IRA, when so many investors turn to the same strategy for alternative asset classes like precious metals or real estate? Let’s evaluate the pros and cons of such a strategy:


  • Tax protection. That’s the whole idea behind the IRA, and it does not go away simply because you self-direct! Investing in a Traditional IRA means having wealth grow tax-deferred, which also has the added bonus of incentivizing a longer view of what you should do with your retirement funds. However, it’s worth noting that these same protections apply to any IRA.
  • Being able to choose your own stocks means you get to determine your overall investment strategy. Depending on your priorities, this can be either a positive or a negative—some people prefer a more passive approach, while those with a Self-Directed IRA tend to prefer an active one.


  • You may find that it’s unnecessarily complicated to seek a specific type of Self-Directed account—for example, an account option within an LLC. This is more than the average investor needs, which is why Self-Directed IRAs are typically better for people who want to invest in an alternative asset class and have no other way to do it.

Although it can be complicated to put together a Self-Directed IRA for brokerage purposes, that does not mean a IRA itself is always a complicated instrument—particularly if you work with a IRA administration firm that’s in your corner.

Alternatives to Stocks in a Self-Directed IRA

There’s no shortage of opportunities to buy stocks. Employee plans, general brokerage accounts—the list goes on and on. There are even apps on the phone that make it possible to buy and sell stocks, sometimes without fees.

The question is: which solution is right for you?

If you want to expand your retirement plans and cast a wider net for your portfolio, a Self-Directed IRA can be a great idea. That strategy usually means taking on a more diverse set of asset classes, going beyond stocks and funds—as well as mutual funds. With a IRA, you can invest in inflation hedges like real estate and precious metals to ensure that the value of your account won’t decrease just because the currency does. But that’s just one example of a reason an investor might want to open a Self-Directed IRA—there are many more.

Interested in learning more about Self-Directed IRAs?  Contact American IRA, LLC at 866-7500-IRA (472) for a free consultation.  Download our free guides or visit us online at