Beyond Traditional Markets
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by: Laurie Bachelder
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MAKE ROOM STOCKS AND BONDS -Alternative investments are becoming an increasing popular choice for those seeking to truly diversify their retirement plan assets. A growing number of investors are learning they can invest in Real Estate and other non-traditional assets using a Self Directed Retirement Account ("SDRA").*
With the fluctuation in the stock market, and the breakdown of consumer confidence in corporate America, there has been an explosion in the demand for alternative investments. These days' investors prefer to have greater choice in where they invest, beyond stocks and bonds.
Examples of Alternative Investments for a SDRA*-
· Residential/Commercial Real Estate
· Foreclosures
· Business Start ups
· Franchises
· Tax liens, business loans, and mortgages
· LLC's
· Private Stock Offerings
Other examples of use for a SDRA*-
· Raise private capital
· Private mortgage lending
· Invest in a friends venture
· Lend money to a local developer
· Pool funds with others for a larger investment
· Invest in what YOU know
As long as the alternative investment is for investment purposes only and does not create a prohibited transaction with a disqualified person, the list is virtually ENDLESS*. Although, regardless of the type of investment, certain rules and regulations remain constant.
What your Financial Adviser may have not told you.
Many people ask, How come I haven't known about this?
Many Financial Professionals may lack the knowledge and resources on the subject and/or Financial Professionals may be disinterested in the SDRA options. Why you may ask. First, they may be concerned about the liability associated with the purchase and/or administration of any nontraditional investment, IRS guidelines must be observed. Second, they may not have the license to advise on certain types of alternative investments. Third, and possibly the most obvious reason, they may not profit from alternative investments as they do with traditional investments such as stocks, bonds, mutual funds, etc. A misconception has been created that all that is allowed in a Retirement Account are the traditional assets, stocks, bonds, and mutual funds to name a few, this is absolutely FALSE. Consequently, many of Financial Professionals do not promote the fact that clients can choose from a variety of investment options for their retirement accounts*.
Don’t’ limit the opportunity to possibly maximize the investment potential of a retirement account because of the lack of knowledge of most Financial Professionals. Be advised, there are a few Financial Professionals who do understand and embrace the concept of true diversification with a SDRA. Investors should work with a Financial Consultant that is a specialist and can advise on traditional and non traditional asset investing, one that will educate them on ALL the investment opportunities available to them and one that will focus on the BEST investment for their retirement account, whether that is traditional or non-traditional assets or both*.
So, are you one of those investors who is no longer satisfied with waiting for returns on traditional investments such as publicly traded stocks, bonds and mutual funds? If you want to explore the possibilities of putting your retirement funds in alternative investments you should enlist the help of a SDRA Consultant that specialize in the field, to educate and advice you through the process, due to the strict rules and transaction guidelines the IRS has sent forth.
Capital Market Solutions, LLC (“CMS”) is a full service Financial Service Firm who is bridging the gap between traditional and non-traditional investing. They advise investors on ALL the investment opportunities that exist today for their retirement accounts. At CMS (through USWA), clients have the option to invest in tradition investments such as stocks, bonds, and mutual funds to name a few. But CMS takes it one step further by also advising clients on non-traditional investments-something most banks, brokerage firms and other IRA sponsors won’t permit you to do**.
*Some restrictions apply. It is important to consult with a professional regarding
IRC Pub 590 regarding regulations before investing.
**Securities offered through USWA, LLC, Member SIPC, and advisory services through USFA, LLC, a registered investment advisor.
About the Author
Laurie Bachelder, Financial Consultant and owner of Capital Market Solutions, LLC (‘CMS’), an Investment Advisory Firm in Portland, ME. Laurie, through CMS, is at work to educate clients and professionals about ALL the investment possibilities that exist today for their retirement account.
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