- Self-Directed Accounts
- Investment Types
- Why Equity Trust
- Institutional Solutions
Self-Directed IRA Concepts
Before we share three reasons why investors seeking a diversified portfolio should consider a self-directed IRA, let’s quickly define the term “self-directed.”
A self-directed IRA (or other retirement account) is technically no different than an IRA or retirement account you may already have or be familiar with.
But with one crucial difference.
The company that holds your IRA determines whether or not they will support alternative asset investments. Directed custodians such as Equity Trust specialize in the custody of alternative assets and enable you to invest in a wide array of assets beyond stocks and bonds.
Now that we have the basics covered, here are three ways a self-directed IRA could potentially help you diversify your portfolio.
Many investors are initially drawn to investing in alternative assets with a self-directed IRA because they aren’t happy with the returns in their portfolio, are looking to invest beyond the market, or are worried about market volatility and want to add more diversification to their portfolio.
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.
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.”
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
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 find, chances 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 machinery, car 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.
Watch: Client Greg discusses diversifying with real estate and private lending in a self-directed IRA.
Should I wait to open an account if I don’t have an investment ready right now?
How do I set up a self-directed retirement account?
Do I have to liquidate investments in order to transfer assets to my self-directed IRA at Equity Trust?
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