“From dairy cows to commercial real estate bridge loans, self-directed IRAs offer entrepreneurial-minded people a chance to invest in something besides stocks, bonds, and mutual funds.”
—Kim D. H. Butler
Diversifying Your IRA with Non-Correlated Assets
When we advise our clients to diversify out of stocks and into non-correlated assets that don’t rise and fall with the stock market, there’s often one-big obstacle: they already have a sizable figure in 401(k)s, IRAs, and other retirement plans that offer limited investment options.
If this scenario describes YOUR situation, you should be aware that you can often use money you already have and multiply it using proven alternative investments that your retirement plan administrator may have never heard of… with a self-directed IRA. However, you should be well-aware of the ins and outs of making such a move.
Many people assume that the only investments allowed in a retirement account are the options their employer offers, such as mutual funds, stocks, bonds, and perhaps a money-market account. In truth, about 1 out of 20 people with IRAs held alternative assets in a self-directed account as of 2015, according to innovative wealth.com. The dollar amount held in such accounts was last estimated by the SEC in 2011 to be around $94 billion, or approximately 2% of IRA funds.
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Leaks. Questions about Russia. Political unrest and climate change debates. A media that has become both the attacker and the attacked. Conflicts of interest, ideologies, and personalities. Citizens weary of increasing political drama, terrorist attacks, violence, and bad news.
We think that people are tired of the word “investment” meaning only the stock market. In broker-dealer circles, even “alternative” investments often refers to products within the mutual fund world, such as REITs (Real Estate Investment Trusts that are securities, not property) or mutual funds that invest in precious metals.
What does much of the farmland in the U.S. have in common with over half the country’s timberland and many of the vineyards and wineries in California?
As celebrated investor Warren Buffett suggests, gold is sometimes used as the “crisis commodity.” When people are anxious or frightened and times get tough–either financially (as in the wake of the 2008 crash) or geopolitically (as perhaps now, following U.S. strikes against Syria and threats from North Korea), they often turn toward gold in the hopes it will provide a safety net.
