By J.P. Dahdah, Founder & CEO of Vantage
According to a study published by the Employee Benefit Research Institute, investors who did not use a Self-Directed IRA to execute investment transactions prior to 2008 lost an average of 25% from their 401k plans during the 2008 global economic crisis.
The inflexibility of traditional IRAs makes them non-conducive for investing in a risky economy. With the stringent limitations on legal assets that qualify under a 401k plan; the likelihood that you are investing in a losing asset is just too great. This makes a Self-Directed IRA the better option for investing in a risky economy.
Here are the reasons why Self-Directed IRAs offer safer investment alternatives when the market becomes very volatile.
1. A Self-Directed IRA offers more options for investment so the likelihood of investing in a losing asset is reduced.
In 2008, precious metals were the investment of choice when the stock market tanked. Gold grew by almost 400% from 2007 to 2011 while the Dow Jones Index lost nearly 40%. A Self-Directed IRA can offset volatility by opening access to alternative investments like precious metals.
2. Self-Directed IRAs allow investments in tangible assets.
Unlike the stock market where assets can go from hero to zero overnight, tangible assets remain marketable despite risky economic conditions. As an investor, you can always hold on to your assets and wait for better times or liquidate them at close to fair market value when all other paper assets are nearing the bottom of the tank.
Contact us to learn more about protecting your investments with a Self-Directed IRA.