Posted by The TaxAdvocate Group, LLC

Alternative Investments to Consider in Your IRA

Alternative Investments to Consider in Your IRA

People are considering alternative assets and investments to secure their future. If you have a self-directed IRA, ordinarily saving money cannot help you get the best. It is essential to get creative with long term investment assets.

There are other ways to grow your funds besides traditional investments. You can consider alternative or nontraditional forms of investments as well.

An alternative investment is an asset that is different from conventional types like stocks, bonds, and cash. One of the best ways to diversify your asset is by having money in alternative investments. The idea is to acquire assets that will yield higher results.

Here are some worthy alternative investment to consider 

    •    Real Estate

Looking for an excellent alternative investment to have in your IRA, consider real estate. You can go for any of the three types of alternative real estate investments like residential, commercial, and REO properties.

Buying a rental property is an effective way to engage this alternative asset. Examples of rental property are commercial buildings and apartments and renting it out. With this, your money is in a safe tangible asset with profits from rent.

    •    Precious Metal

One of the best alternative investment strategies is a precious metal such as silver and gold. Not only are these metals valuable and rare, they hardly depreciate.

Besides, precious metal offers an excellent and valuable means to safeguard your asset should there be inflation. Hence, the value of your precious metal will not decrease but rise even if the dollar weakens.

    •    Hedge Funds

Like mutual funds, hedge funds are an alternative investment. It is a pooled fund in that it involves a lot of funds gotten from a lot of investors. The aim is to invest in various assets. It increases diversification and reduces trading costs.

While mutual fund, however, focuses on publicly listed bonds, stocks, and other traditional investments, one can invest in additional exotic investment with hedge funds. Investment options like private equity, derivative, and other ownership investments are examples.

Unlike mutual funds, hedge funds use pretty strong investment strategies like debts and derivatives. With this, in the last 20 years, investors in hedge funds have seen superior returns. 

Unlike mutual funds again, hedge funds have the advantage of less regulation from the SEC compared to other investments like mutual funds. Since the control is low, this makes the risk involved in hedge fund higher. Hence, only experienced investors do consider hedge funds.

The structure of hedge funds, most time, is a limited partnership private investment company. This structure makes the number of investors low, which translates to huge investments.  

In addition to the limited partnership nature, liquidity purpose also makes hedge funds limit the number of investors. Investors will have to secure their funds for at least 12 months. This is because the investment is not as liquid as others like stocks. 

Also, since IRAs are usually long term investment, a hedge fund is a viable investment alternative.

    •    Private Business

How beautiful it is to own a business without having to run it! This is one of the good news about investing. There is an opportunity to fund private businesses like restaurants and boutiques.

It is the return from this type of investment that makes it a great example of an alternative asset. If you are investing in a startup, we consider investing a few pennies for a start. With this, if the business thrives, you can have double or triple your investment in the first year.

This calls for investing in a business that you believe in. Should you have any doubts about a company, it is an indication to consider other options.

    •    The Internet

Are you part of the people hesitant about investing online because it is an intangible asset? You might want to think again because it is one of the fastest-growing alternative investment options around.

With the advent of the digital age, it is glaring that it's here to stay. Companies like Apple and Google has its stock price always rising.

You can always expect a return if you invest in them, provided they keep up their performance. Be sure, however, to research on any online company you decide to invest in.

Do the research and explore how they will perform in the coming years. When you make up your mind, you can buy bonds, futures, or stocks in any of the companies.

The TaxAdvocate Group, LLC
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