By J.P. Dahdah, Founder & CEO of Vantage
Investing directly in private companies can provide a great opportunity for capital appreciation in Self-Directed IRAs. Unlike investing in publicly-listed companies where insider trading can be a problem, you can basically know everything about your private company, giving you a clear picture of the risk return potential involved.
But like any investment, selection plays a very important role. There are several factors to consider like the industry, competitive environment and, most importantly, the company.
Any prudent investor will never part with his money without first understanding the possible implications of investing Self-Directed IRAs. You have to weigh the pros and cons of investing in your particular choice of company and the most effective way to do that is through doing thorough due diligence.
Due diligence is the investigation or research of a potential investment, which requires a careful inspection into every aspect of your company, including management, organization, operations, and most critically, financials. This means careful examination of a company’s historical performance, business plan and financial projections. You should also visit the company and talk to management so you can personally assess the likelihood of growth for your Self-Directed IRAs. Ultimately, you need to understand what you’re getting yourself into. Does it have a potential for high investor returns or is it a potential problem?
Use your due diligence to reveal the answer.
For more information on how you can discover your IRA investing alternatives, contact our team at (866) 459-4590 or ClientService@VantageIRAs.com.