What Volatility? Protect Your IRA with Alternative Investments

 |  General Self-Directed IRAs
VOLATILITY

By J.P. Dahdah, Founder & CEO of Vantage

VOLATILITY

Everywhere I turn, I hear complaints about the volatility in the market. I turn on CNBC, and it’s all about how volatility is erasing billions of dollars in value from investor portfolios. I pick up the Wall Street Journal, and I see the stress of traders. The recent volatility has led to market uncertainty and an alarming decrease in investor confidence.

What is my response to these financial news stories?

A joyful chuckle. I’m optimistic because it reassures me that I made the right financial choice by investing my IRA savings into alternative investments. This is why I love alternative assets so much. The lack of correlation my alternative investment portfolio has to the traditional stock market enables me to have peace of mind, which in my opinion, is one of the main goals as an investor. I want to feel comfortable about where my money is working for me and not be always concerned about its wellbeing. I have the luxury of not panicking about the constant ups and downs experienced by those who have chosen to place their faith in the stock market.

When others complain about the market volatility and express their emotional concerns about how news stories will possibly put a negative dent in their retirement plan, I can’t relate.

Are my alternative IRA asset values going to be affected by who is elected President next year? No. Are my IRA asset values being affected by the impact of tariffs or trade wars? No. You see, macro-economic or political conditions don’t influence my alternative investment holdings. Are they wholly protected against investment losses and risk? Of course not, but the risk is limited to specific independent factors, not influenced by broad issues that conversely impact stock market conditions and results. When others complain about the market volatility and express their emotional concerns about how news stories will possibly put a negative dent in their retirement plan, I can’t relate.

Some advisors and investors shed a negative light on alternative investing because of the “lack of liquidity.” When I hear that, I immediately remind them it’s because of their illiquid nature that I love owning them in my IRA.

An illiquid investment vehicle by design. I can’t touch my IRA money without a penalty until I reach the age of 59 ½, so investing in illiquid assets, which may take 3-7 years to produce my expected returns, is perfectly fine with me.

I would much rather have illiquidity in my IRA than constant volatility, and I know our alternative investor IRA clients agree! So the next time someone is complaining about the volatility they are experiencing in their retirement portfolios, be sure you encourage them to call Vantage and learn about the power of Self-Directed IRA alternative investing!

 

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