By J.P. Dahdah, Founder & CEO of Vantage
What are alternative fixed income investments?
As an investor, one of your goals should be simply making sure you do not run out of money in retirement. Alternative fixed income investments can help, but to begin with, let’s clarify what a fixed income investment is.
Investopedia defines fixed income investments as “a type of investing or budgeting style for which real return rates or periodic income is received at regular intervals and at reasonably predictable levels.”
Alternative fixed income investments can be very valuable for Self-Directed IRA investors because they provide a regular, stable income.
They can be a predictable, reliable way to make sure you do not run out of money in retirement.
Outdated fixed income investments are typically:
- Bonds
- Certificates of deposit
- Preferred stock
But, your Self-Directed IRA affords you the ability to invest in alternative fixed assets, too. These are assets that, in many cases, can provide higher and more stable returns than traditional fixed income investments.
We are seeing a rising demand among our investors for income producing real estate and other alternative income producing assets like equipment leasing.
Achieving a higher rate of return on fixed income is always possible, but you must be more flexible than in the past. The traditional fixed-income investments like CDs, money market funds, and bonds are not the place to look for yield. The real place to find higher income is in the “alternative fixed-income” space—lesser known investments that don’t follow the mainstream rules of fixed income, and don’t have all of the same qualities.
They don’t have the same guarantees, the same terms or time frames. Not many know where to look. But, if you do, you can usually get a much higher rate of return.
Keep in mind these investments are not like CDs, they do not carry the guarantees of the FDIC.
They come with risk, but they are still fixed-income investments that can provide real value in your portfolio. Before you invest, make sure you understand all of the risks and rewards involved.
For more information on how you can discover your IRA investing alternatives, contact our team at (866) 459-4590 or Info@VantageIRAs.com.