Self-Directed IRA Investments
In recent decades, many people have begun turning their traditional IRAs into a self-directed IRAs to access more investment opportunities. A self directed IRA (SDIRA) grants you complete control over your investments and greater latitude to diversify your retirement portfolio and grow your account.
When investing in a SDIRA, it’s important to remember that all profits generated from the SDIRA must be placed back into the account. Since most accounts can’t be touched until retirement age, it’s important to commit to long term trading and diversifying your portfolio.
Of course, with every investment strategy we’re always looking to find that lucky instrument that will generate the highest yields. Fortunately, we have plenty of experience in SDIRA consultation and know a few tricks of the industry. That’s why we’ve compiled this list of the ten best investments that will tie in perfectly with your SDIRA account.
1. Business Equity
The main draw of a SDIRA is the ability to invest retirement funds into a business directly. Not only does business equity increase your net worth, but it has historically been one of highest yielding investments for investors.
With that said, it’s important to do your research. It’s not guaranteed that your investment will land on the next Facebook or Twitter.
It’s also important to remember that you cannot conduct any “self-dealing” transactions. This means that you cannot invest in a business you or a disqualified person owns.
2. International Stocks
Often overlooked, foreign market capitalization in a number of exchanges remains competitive with the New York Stock Exchange. We love international stocks because many emerging markets are still in their youth, creating a prime opportunity for high growth.
Foreign markets may not be as stable, depending on the exchange, which is why it’s important to do intensive research. The opportunities for growth are immense and international businesses like Alibaba and Samsung are simply hard to ignore.
3. Real estate Investment Trust (REIT)
REITs are some of our favorite long-term investment strategies available. REITs are a form of equity associated with a property that is being leased or rented out. The main appeal of an REIT is that there is no tax involved for the trust as long as 90% of income is paid as dividends to shareholders. Most of the dividends paid out will be taxed as personal income rather than capital gains.
4. Flip Real Estate
With prices rising rapidly nationwide in a number of cities, the real estate market is the hottest it’s ever been. Fortunately, a self directed IRA can be used to invest in property, although if you use any loans to finance the property it will be subject to the unrelated business income tax (UBIT).
Flipping real estate is not an easy task and typically requires professional expertise. Home flipping can generate high returns, but it requires a lot more work than many other investment strategies.
Investing in a good dividend payer is a safe way to always earn a return on your Roth IRA. Even if stock prices have tumbled a bit, you can always wait out the market by collecting dividends into your account.
6. Precious Metals
Gold markets have been historically bullish and have generated immense returns over the past few decades. You can also consider investing in a basket of different metals, like silver and copper, to earn some high returns and diversify your portfolio.
7. Crypto Currencies
Crypto currencies like Bitcoin are as much volatile as they have been bull. This strategy should not be taken lightly, considering you’ll have to take on all of the risk. Of course, risk doesn’t necessarily originate from the market either. The space is rife with hackers.
At the current moment, the market seems to indicate that many coins are set to rise over the next five years, although this is unpredictable.
8. Private Lending
Due to high credit requirements and the long bureaucratic lines to get a loan, there’s lots of demand for hard money lenders. Hard money lending to a non-disqualified person earns you a return off of interest payments and remains a great long-term strategy for wealth. Be sure to take the skeptic’s eye before giving out a loan using your SDIRA.
ETFs are a cheap way to generate income on your Roth IRA without having to do much of the work. With increased tax advantages, ETFs are an attractive investment for Roth IRA holders looking for a cheap investment plan. ETFs contain a variety of different assets that are tracked on different indexes.
The current bond market is difficult to gauge. With rising interest rates, prices have fallen and many people are skeptical of the health of the market. Fortunately, economic growth and tax reform have shown positive signs of potentially continuing bonds on their bull streak. In terms of a long-term investment, US bond markets have been historically positive. Whether or not to invest depends more on your own knowledge than the bold predictions of analysts and skeptics.