Stock Market Got You Down? Hedge Your Bets with Alternative Investments in a Self-Directed IRA

A few weeks ago we blogged about how many different alternative investments are permissible in self-directed IRAs. From that article your takeaway should have been that just about anything you can do to earn income in your every day life can also be performed in a self-directed plan to build wealth for retirement. Now it’s time to learn how alternative investments in a self-directed IRA can help you offset stock market twists and turns to build and protect the wealth in your plan.

The recent dive of the stock market boldly illustrates just one more benefit alternative assets present for investors who want to secure a successful retirement future: wide-spread diversity, which offers an attractive hedge against Wall Street bets. We are not going to dwell on the downturn the markets took recently, because that is, after all, the name of that game. However, we will explain how you can supplement the chances you take on the market with non-traditional assets that may offer healthier potential returns—minus sometimes gut-wrenching ride Wall Street provides.

Self-directed IRAs and similar plans are used by those who want more control over their retirement funds and investing decisions. Plan owners are able to choose from a wide variety of diverse assets that they know and understand to increase the earning potential of their retirement portfolios. However, those unfamiliar with the process may be unsure of how to start self-directing their retirement funds.

How do you add alternative investments to your portfolio?

First, choose a self-directed retirement plan administrator. Even though many different assets are permissible in these plans, not every self-directed plan custodian serves all types of alternative investments. Be sure your administrator is well established and reputable, and that they accept the types of assets you are interested in acquiring.

Open your self-directed account.

  • Simply open an account and begin maxing out your yearly contribution limits, including catch-up allowances, if applicable.
  • Roll over funds from an existing plan, such as a 401(k) with a former employer.
  • Transfer funds in a plan managed by another administrator to a self-directed plan with Advanta IRA.

Perform your own due diligence and begin investing.

Once you open your account, you may immediately begin adding alternative assets to your retirement planning toolbox. However, keep in mind that when you choose to self-direct, you are in charge of performing the critical and required due diligence to insure your investments are viable. You can and should seek the advice of experts in tax and legal fields to help you navigate this process.

While you are free to invest in what you know best, failing to fully vet potential assets can open the door to fraudulent choices. Not seeking sound advice from proper professionals can result in your performing a prohibited transaction with your IRA.

Partner your IRA’s funds to acquire bigger investments.

Once you’ve accomplished the above, you’ll be happy to know there’s an additional bonus: when it’s time to choose your assets, if your IRA is short on capital you can partner those funds with another person or entity to invest. Even if the account has adequate cash, you can partner the IRA with your personal funds or with another IRA to obtain more lucrative investments and/or to limit your risk if the asset doesn’t prove fruitful.

As one of the leading self-directed administrators in the nation, Advanta IRA is equipped to handle a wide variety of non-traditional investments—from real estate to precious metals to foreign land and even oil and gas rights or accounts receivable, timberland…and much, much more.

Our clients hold over $700 million in alternative assets in self-directed retirement plans and our job is to ensure the finer details of the administration of their accounts are in compliance with IRS standards. Our unique personal and professional attention to this service ensures our clients have the time to concentrate on the more important task of researching investments that add diversity to their portfolios in their efforts to build the retirement income of their dreams.

If you have any questions about this article or wish to learn more about self-directed retirement plans, please contact us.

About Jack Callahan

Jack proudly earned his bachelor’s degree in finance and multinational business from Florida State University and his law degree from the University of Florida College of Law. He established Advanta IRA in 2003 and has steadily nurtured and grown the company and the team every year since. Prior to founding Advanta IRA, Jack delivered specialized counsel to real estate investors, small business owners, and real estate professionals on tax, legal and financial matters. As an industry expert, Jack is a frequent speaker on self-directed retirement plans. He is an accredited continuing education instructor for the Florida and Georgia Bar Associations, Florida and Georgia Real Estate Commissions, and The American Institute of Certified Public Accountants.