Are Self-directed IRAs safe? American IRA-a National Provider of Self Directed IRAs answers this frequently asked question in light of the recent NASAA Investor Alert to warn investors of the potential risks associated with investing through self-directed Individual Retirement Accounts (self-directed IRAs).
Jim Hitt, CEO of American IRA, explains “Self-directed IRAs and other retirement accounts are not inherently more or less safe than conventionally administered accounts. For the most part, investments derive their safety and risk characteristics not from the way the account is taxed, but from the properties of assets it contains. If you invest in low-risk assets, your investment risk in your IRA will be low. If you invest in riskier assets, your investment risk will increase – depending on how you combine those assets.”