Investing with your IRA
Why adding alternatives to your IRA can help protect your retirement funds
In our previous blog post, The Importance of Diversification, we discussed how a diversified portfolio has historically increased overall returns and decreased risk. This is not limited to your investment accounts. In fact, a similar diversification approach should be applied to your retirement accounts.
Lining up time horizons
When we think of the investments in our retirement accounts we immediately think long term. Our retirement accounts force us to be a long term investor that is acutely aware of risk. This perfectly lines up with the thesis of private equity funds. Most private equity funds have a 10 year time horizon. These funds take measured risks and have strong track records of solid performance. They also are uncorrelated to moves in the public markets, giving your retirement account the diversification it is likely missing.
If adding exposure to alternatives in your IRA is such a no brainer, why isn’t this more widely adopted? Well this one is a two-fold problem that has just recently been solved. The access to top performing private equity funds has been extremely limited. In fact, most private equity funds are only available to endowments, institutions and ultra-high net worth investors. These funds also have minimums in the multiple-millions of dollars. The goal is go increase exposure to alternatives in your retirement accounts, not throw your entire retirement into one single investment! The other issue used to be the custodian of your IRA. These traditional custodians don’t like the hassle of an unlisted investment in your account. It’s out of the box! It’s more work for them! Thankfully our friends at AltoIRA have solved that problem.
How to invest with your IRA
- Log in to your Aqua account and select your investment
- Once you’ve selected your investment and decided the amount you’d like to invest, select “Invest with Alto IRA”
- Team Aqua will reach out and provide a custom link to the deal offering
- If you do not have an Alto IRA account, you will be prompted to create one
- Decide if you would like to set up a traditional, SEP or Roth IRA
- Work with Alto to fund your new, self-directed IRA account
- You’ll work directly with Alto IRA to eSign and fund the investment on their platform
- Sit back, relax and enjoy a diversified IRA account!