What are IRA good investments? Basically, any investment that allows your fund to grow would be a good investment. However, the growth of IRA investments can vary greatly, even among the good ones.
Brokers and IRA trustees often refer to traditional or conventional investments. Stock, for example, is a traditional investment, but you would not want to put all of your money into one company’s stock. The company could lose money or go broke and you could lose your entire investment.
Similarly, if you invest only in the stock market, even if you invest in several different companies, you could have a problem. At the time of this writing, the stock market has been flat or falling for most of the last year. This has affected the growth of IRA investments for many people.
You see, a large number of brokers suggest mutual funds, as a way of diversifying, but mutual funds still rely on the stock market for continued growth. Many people don’t realize that. Simply put, to diversify means that you avoid putting “all of your eggs in one basket”.
The best way to diversify is to look for other options that still are IRA good investments, but do not rely heavily on the stock market. The growth of IRA investments like CDs and bonds, for example, is not affected by the stock market, but the returns are slow. Interest earned is the only way to profit from them.
One market that a few people are turning to enhance the growth of IRA investments is the real estate market. The idea is not a new one. It is something that Congress considered when they created regulations concerning IRAs. But, unlike other types of allowable investments, the real estate market has never been fully explored.
A few brokers (Equity Trust for example) are now offering their clients the option of using the funds in their self directed IRA to purchase real estate for investment purposes. This can be property that will generate rental income or the fixer upper that can be resold at a profit. The money for the purchase and for any future costs (like maintenance) comes out of the IRA. The profits go in.
One client was able to increase his balance by $97,500 in less than two years. He was a smart investor, with years of experience in the real estate market. But, you could make a similar deal, even if you have no experience.
A small number of experienced real estate investors are willing to take IRA account holders “by the hand” and help them avoid the headaches and the pitfalls. It’s important to get that kind of help, because if you make the wrong choices, you could lose your investment and IRA custodians, trustees or brokers are not allowed to suggest specific properties for purchase. They simply do as you have directed them to do. The continued growth of IRA investments is dependent upon making the right investment choices.
What are IRA good investments? Maybe real estate, if you get the right assistance from the right people.