With increased volatility in the stock market, many investors respond by opening a self-directed IRA Austin TX. The Fed recently decided to raise interest rates by a quarter of a point, which will likely increase the volatility in the markets. Experts say the rate hike marked the first one since the financial crisis about 7 years ago. By opting for a self-directed IRA, investors achieve diversification that protects them from uncertain financial times. Some investors want to avoid watching their retirement accounts plummet if the stock market crashes. Even if the market slowly declines during a new bear stock market, you could guard against losses by locking in gains and then moving to alternative investments with greater potential. Most experts say they can’t accurately predict how higher interest rates will affect the stock market. However, it will likely cause mortgage costs to increase.
Increasing non-traded alternatives
One reason non-traded alternative investments appeal to investors during a volatile stock market is because there are fewer hurdles standing in the way of investing. Most investors have more knowledge about alternative investments or know how to get the information about alternative asset classes.
Changing your return and risk profiles
Whether you want to take a conservative or a more aggressive approach to investing, non-traded alternative investments in a self-directed IRA give you more freedom and flexibility. With a 401(k), you are typically tied down to mutual funds and life cycle funds offered by the plan. A combination of stocks and bonds doesn’t provide the returns desired by many baby boomers nearing retirement.
Investing in real estate
With the recent hike in interest rates, many real estate investors prefer to tap retirement funds to buy real estate instead of taking out a traditional mortgage. Most likely, mortgage rates will increase within the next few years. Real estate investors can use money from their self-directed IRA accounts in order to avoid tax consequences. The money grows tax-free just as other investments enjoy the tax deferment in a retirement account. At this time, the rental market is booming in Austin, Texas. You don’t need to only invest in real estate in the local market to profit. In most parts of the country, real estate remains a viable and lucrative investment for people who want a great ROI. Whether you compete for great foreclosure deals or buy a commercial real estate investment, the options are wide open with a self-directed IRA linked to checkbook privileges.
Looking at crowdfunding
Another reason opening a self-directed IRA appeals to cutting-edge investors is due to the fact they can use retirement money for equity crowdfunding possibilities. With the new year, people in the general public may invest in private companies issued using crowdfunding vehicles.
Choosing investments you understand
When you choose a self-directed IRA, you get to invest in what you understand. Alternative investments let people invest in industries and businesses in which they have more understanding and a higher level of expertise. Some of the ideal investments most popular today include real estate, offshore investments, tax liens, loans and private party investments.
Once you decide to open a self-directed IRA, the process is simple. You can transition from a traditional IRA, 401(k) or Rollover IRA into a self-directed IRA. To keep the tax advantaged status, it is important to rely on a trustee-to-trustee transfer or a 60-day rollover.
Whether you live in Austin, Texas or another part of the country, let New Standard IRA get you started with a checkbook self-directed IRA. You can enjoy reduced fees, security, simplicity and flexibility with an IRC LLC. For more information on a free consultation for a self-directed IRA in Austin, TX, please contact us.