I have been saying time and time again that it is super important to diversify your retirement portfolio. One of the best ways to diversify your retirement portfolio is with a self-directed IRA. A self-directed IRA gives you the ability to invest in things other than the stock market. What sort of other investments? Investments like real estate, gold, private placements, etc.
Why is this such a great way invest for your retirement portfolio? Ultimately it is a great way to invest because you can spread your risk across the field while not having to sacrifice much if any potential return. Why else is it a great idea to diversify with a self-directed IRA? The market currently keeps sending red flags that this year is going to be a rough one and diversification in the right areas is going to help you immensely.
We have already seen a lot of volatility this year in the stock markets. While the S&P 500 is up 1.86% year-to-date it hasn’t been without its wild swings. The following is the performance month to month for the S&P 500 and you will see the volatility that I am talking about.
April: 1.43% so far.
The current outlook on the stock market is still quite shaky. There are multiple things playing into the current outlook like the value of the dollar but the biggest thing right now is earnings. Since we have recently ended the quarter we are smack dab in the middle of when companies show the earnings that they have made for the previous quarter. Right now we are seeing many blue chip companies that are showing a drop in earnings.
While earnings are a huge play right now they aren’t the only thing on the horizon that is making investors skeptical of the market. The idea that the feds are going to be raising interest rates is another hit to the market. There is a correlation that when interest rates go up the market goes down.
These are really just a few of the issues hitting the stock markets today but you don’t have to worry about them if you have sufficiently diversified your retirement account inside the stock markets and outside the stock markets.
To sufficiently diversify outside the stock markets with a retirement account you will need to have a self-directed IRA or 401k.
At Accuplan Benefits Services we are here to help you set up a self-directed IRA so that you can invest diversify your account into things like real estate or gold.
Author: Nick Barker