No. You do not have to invest your IRA in the stock market.
But, this depends upon the type of IRA you have.
If you have a conventional IRA with a mainstream custodian (bank, broker, etc.), your investments are typically limited to stocks, bonds, and mutual funds. These restrictions are often based on assets the custodians and/or IRA administrators recommend and sell.
Self-directed IRAs are different than conventional IRAs. And there is great power within that difference. Self-directed accounts give you the freedom to use alternative investment options that exceed far beyond Wall Street stocks, bonds, and mutual funds. You call the shots and make your own investment choices based on your own knowledge and expertise.
Plus, you can transfer funds from your current IRA to a self-directed IRA at Advanta IRA tax free.
Investment Alternatives to the Stock Market
The alternative asset pool available to self-directed IRAs is vast. You can invest in real estate, private equity, crowdfunding opportunities, Bitcoin and other cryptocurrency, private mortgages and notes, precious metals, and much more. You can even invest in stocks, bonds, and mutual funds because diversity is essential in any investment portfolio.
Watch this video to learn more about alternative assets.
Self-Directed IRAs Put You in Control
Individuals who self-direct their IRAs and solo 401(k)s like the freedom and control these plans provide. Freedom lies within the massive number of alternative assets available to build wealth in these plans. And when you can invest in things you know and understand, you gain control over how your investment dollars are spent. You capitalize on your own knowledge to maximize the wealth building potential in your plan.
For example, realtors can invest their self-directed IRAs into all types of real estate. Single and multifamily properties, raw land that looks ripe for development, tax liens and deeds, rentals, and rehab property. Understanding the market and demographics like a realtor does helps them make wise investments.
Those who are savvy in business can invest in startups or distressed companies looking for a boost of capital to revamp. Venture capital and angel investing opportunities are permissible assets in self-directed plans. Private equity and stock are popular assets for those who understand the ins-and-outs, and their knowledge can help them mitigate certain risks.
There are so many investments available besides stocks, bonds, and mutual funds. The only assets prohibited in IRAs are life insurance contracts and collectibles. Other than that, you can get quite clever at acquiring diverse assets that have the potential to earn tax-sheltered income in your IRA.
What Advanta IRA Can Do for You
Advanta IRA is a leading self-directed IRA provider with nearly two decades of experience in the alternative investment industry. We educate and empower our clients and other investors who want to choose the investments for their retirement plans. We foster personal but professional relationships with our clients that are paramount to our success and theirs. We make the process of opening and funding your account easy and painless. With nearly $2 billion assets under management, our clients are able confidently invest, knowing that the administrative details we provide are taken care of and in compliance with the IRS.