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SDIRA Concepts

3 Ways a Self-Directed IRA Can Help You Diversify Your Portfolio

March 25, 2020
My long-time financial advisor had stressed the value of diversification and rebalancing of assets, and I decided to take action. I wanted to stabilize my retirement portfolio.
Alan, Texas


Alternative assets typically don’t correlate to the stock market and can help add diversification to your portfolio. As Andrew Menachem, CIMA®, Wealth Adviser at The Menachem Group at Morgan Stanley in Aventura, writes: 

“For long-term investors, a diversified portfolio can help you manage volatility in the stock market. Instead of having 100 percent of your portfolio in U.S. stocks, you might have significant allocations to bonds, real estate or private equity. While it doesn’t guarantee a profit or protect against loss, a diversified portfolio could potentially reduce the impact of the stock market on your balance sheet.” 

2. Customize and diversify your portfolio with more investment freedom and flexibility. 

With your Equity Trust account, you have the opportunity to invest in alternative assets such as real estate, promissory notes, private equity, precious metals, cryptocurrency, and more. Additionally, you can invest in traditional assets such as stocks and mutual funds – all through a single custodian. 

It’s either one or the other at many companies – only alternative or only traditional assets. But with a self-directed account at Equity Trust, you hand-select the investments in your portfolio with the freedom to diversify in whatever way makes sense for you. 

“To my surprise, I discovered there were many non-traditional assets such as real estate, tax liens, and promissory notes that our retirement dollars could invest in using a self-directed IRA.”  – Susan, New York

“When I first heard about Equity Trust Company a couple of decades ago, I didn’t believe any of this was possible. I wondered why I’d never heard about it.” – Joel, New York

3. Take control and invest in what you know best.

If you have experience or an interest in real estate, invest in real estate. If you’re passionate about cryptocurrency or renewable energy, you can do that too. 

If you know of an exciting new start-up company, have specialized knowledge from your background or experience, or find a private equity fund you like, it’s possible to invest with your retirement savings. Regardless of the opportunities you findchances are, you can do it with a self-directed IRA at Equity Trust. 

” I think people are better off investing in what they know, but even then, due diligence is critical. “  – Don, Tennessee 

“When I tell people that I invest in real estate through my IRA, they usually look perplexed,” Kay says. “I can tell that most do not know what I am talking about. However, my successes spike their interest.”

“I have not had to deal with the emotional ups and downs that I would experience when my retirement savings were invested in mutual funds and stocks.” – Kay, California

As you’ll learn in your research, the IRS only provides a list of assets you can’t invest in. Beyond that, there is a myriad of options available to self-directed IRA investors. 

Equity Trust clients have invested in llamas, toy factories, farm machinerycar dealership financing, Broadway productions, X-ray machines, new-age electric cars and many other unique investments beyond real estate and other more common alternative assets. 

There are several reasons to open your self-directed account at Equity Trust Company, even before you have selected an alternative investment.

  1. If you are transferring cash/assets to your account from another custodian, you should allow time for the resigning custodian to process your request and deliver the account holdings to Equity Trust.
  2. You have the ability to invest in traditional assets while you are researching other opportunities.
  3. Once you have selected an alternative investment, you will not have other actions in process that may delay the funding processing.

To set up a self-directed retirement account with Equity Trust visit myEQUITY and start the process today. You can also visit How to Get Started for more information. Or simply schedule a free, one-on-one consultation with an Equity Trust Senior Account Executive.

Although transfer of cash is a much faster process, clients may choose to transfer assets in kind. This allows clients to maintain their current investment positions, the only difference being the registration of the asset. However, the ability to transfer assets in-kind from a tax-qualified plan will be subject to the provisions of the arrangement; therefore, you should consult with your plan administrator regarding the permissible options allowed under the tax-qualified plan.

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