These days, people are talking about elections and what will happen over the next four years. Yet we think that investors who are using a Self-Directed IRA will not necessarily only think about the next four years. That is because retirement investing is about more than four years. For many investors, it is about the next four decades. For others, it might be about the long-term future that is much closer at hand. But how should investors who are thinking about a Self-Directed IRA think about navigating the next four years, no matter what happens in politics? Let us look at some ways the Self-Directed IRA is a powerful way to decouple from the headlines.
Why a Self-Directed IRA Allows More Independence
Many investors make the mistake of watching the latest political headlines when it comes to their investing. The problem is this is not always the ideal way for investors to achieve their goals. For an investor who uses a Self-Directed IRA, they will have access to assets outside the traditional assets of stocks and bonds. This means that investors who use a Self-Directed IRA can have a degree of independence that does not require constant headline-reading. For an investor who uses a Self-Directed IRA for real estate, for example, they have to focus on that specific investment rather than where the stock market is headed on any particular day. That is one powerful advantage to using a Self-Directed IRA; it allows for asset diversification that can be a powerful way to build long-term wealth.
The truth is, a Self-Directed IRA allows for more independence because you will be the one in charge of your own financial decisions. As a Self-Directed IRA administration firm, for example, American IRA will not make specific investment recommendations. Rather we will serve as the custodian on the account. You will be the one making the decisions here. That means that you do not have to rely on any one political party in office for the next four years. You will be the one making investment decisions based on your own priorities, your own retirement goals, and the choices you want to make based on the types of assets available to you.
Should You Have a Long-Term Approach?
One mistake many investors make is being too hasty with their investment decisions. That is especially true for retirement investors. For many retirement investors, the timeline they are working on involves decades at a time. For example, if you are a 25-year-old individual and you want to retire at 65 or 70, you have more than four decades to go. That is four decades of research, investing, and growth. What happens in politics within the next four years is important, sure. But there is simply no telling what the next four decades will bring.
That is why a Self-Directed IRA can be such a powerful way to invest. It means that investors can choose to invest in nontraditional assets with a long track record. For instance, investing in gold and silver can be powerful because these assets have thousands of years of history behind them. For investors who choose real estate, they can be confident that the value of land will not move quickly. It does not usually drop as quickly as the stock market can potentially drop in a day, for example.
Is this to say that investors should not pay attention to what comes next in national politics? Of course not. That is your choice. But for a Self-Directed IRA investor, the real decisions lie in what will happen over a much longer timeline than that.