IRAs and 401ks are retirement accounts that give you great tax benefits for retirement. Typically there isn't much diversity in most retirement accounts because most IRAs and 401ks are invested in stocks and bonds. This leaves your retirement accounts very dependent on how well the stock market does. The stock market is quite risky and the current state of the stock market is pretty shaky.
Current Stock Market Outlook
The S&P 500 Index was up 1.8% during the first quarter of 2014 while the Down Jones Industrial Average was down .2% for the quarter. The performance is nothing to write home about. There are many investor gurus who are quite skeptical about the near future of the stock market. There are plenty gurus that have the opinion that the US and global economies are likely to have a slow steady growth over the next several months. Even though the outlook seems to be on the rise there seems to be a big consensus that it will be a pretty bumpy ride over the next few months.With that said there is also a lot of consensus that there seems to be a correction on the horizon but who knows when. At the end of the day nobody knows what the future holds for the US and foreign markets.
What Does All This Mean
What it really comes down to is that there isn't any sure way to tell what the market holds but there are ways to get an idea of what it holds and the true future outlook is shaky! Knowing that the future outlook is shaky what should you do? You should diversify!
It is very smart to diversify your investment portfolio, especially your retirement portfolio. Diversifying your portfolio is always a very wise decision. There is truth that a diversified portfolio might not be able to make as much as other non diversified portfolios but because it is very hard to actually beat the markets all the time it is good to have a great spread. To learn more about diversifying your retirement account check out, The Way To Diversify Your Retirement Portfolio.
Diversify Through A Self Directed IRA
While you can diversify your retirement account by making sure that the stocks and bonds that you carry are quite diverse and fairly evenly weighted. While this is an option for diversifying it isn't the best way to diversify your retirement account. The best way to diversify your retirement account is through a self directed IRA or self directed 401k.
What a Self Directed IRA and Self Directed 401k Allow you To Do
A self directed IRA and 401k allow you to invest in things that aren't normally available to you through most custodians. Most custodians (those who hold your retirement account and invest it for you) do not allow for investing in much else besides stocks and bonds. This is pretty lame becaues you are missing out on investing with your retirement more diversly and you are also potentially missing out on great investments while getting the great tax benefits that come with a retirement account. If you would like to invest your retirement in things other stocks and bonds you typically have to go to a custodian that allows for self directed retirement accounts.
What Types of Investments Are Allowed In A Self Directed IRA And 401k
Self Directed IRAs and 401ks offer just about endless possibilities to investing with your retirement accounts. Just about anything you can dream of investing is is possible through a self directed account. What are some of the most popular investment types in a self directed IRA? Gold, silver and real estate are some of the biggest investment types along with private placements. Because you are able to do just about any type of investment with a self directed account there is no better way to diversify your retirement account. If you feel the stock market is going to be in a bad spot over the next while why not invest in gold or real estate?
There are so many ways to diversify your retirement portfolio through a self directed IRA. Take advantage now by setting up an account or call us and learn more about what a self directed IRA can do for you. Don't wait long to take advantage especially while there is a lot of uncertainty about the current future of stocks.
Author: Nick Barker