How does a Self Directed IRA facilitate true diversification?
When financial advisors talk about diversifying your IRA, they usually mean some notion of investing in a variety of market related products. These products can take the form of different stocks, bonds, mutual funds, etc. True diversification, though, extends beyond the stock market and its sister products. Although it’s true that the standard balanced portfolio will generally be safer than one which is asset specific, your retirement fund will still be at the mercy of market swings. An investor who is interested in greater safety and potential profitability should carefully consider rebalancing his/her retirement fund with real world assets. This rebalancing cannot be done with most standard IRA platforms, but instead requires a Self Directed IRA with its inherent flexibility.
Asset Choice – Real Estate
Real estate is one of the most popular choices for Self Directed IRA investors. It provides a tangible asset which offers the potential of cash flow and income for a more solid retirement base. The kind of real estate which is most appropriate for a retirement plan is largely dependent upon the temperament of the specific investor and his/her desire to be involved with the property. Single or multifamily rentals are a common investment destination and are surprisingly easy to manage with Broad’s Checkbook Control capability. Other common real estate placements include commercial property, vacation homes, and farm land.
Asset Choice – Precious Metals
An independent Self Directed IRA allows for smarter and more economical investing in precious metals. By taking personal control of the retirement funds, the investor can now research dealers and buy according to price and reputation. Additionally, the investor may also hold officially minted coins personally. Those wanting full control of physical gold will not be able to realize that option with the benefit of a self directed platform.
Asset Choice – Active Business
For hands-on investors interested in a true cash flow investment, a Self Directed IRA allows for taking retirement funds and investing them in an active business. The business type can range from something small like a local retail establishment to businesses larger in scale like multi-state franchises.
Are there any asset choices that are not permissible to be held by a Self Directed IRA?
The only two assets that are not available to a Self Directed IRA are collectibles and life insurance contracts.
Broad Financial is a leading custodian of enhanced retirement platforms that give investors the tools to take a more active role in managing their retirement investments. We offer industry leading Self Directed IRA, Checkbook IRA, & Solo 401(k) products that allow you to invest outside of traditional Wall Street stocks & mutual funds, and yet still remain within the IRS definition of an approved retirement account.
From self-employed individuals to small business owners to those who simply want total investment flexibility, Broad Financial has an investment platform that will fit your unique needs. If you have any questions, please call us at 800-395-5200.