Should You Invest Your Self Directed IRA Funds in a Down Market?
May 10th, 2008Investing and Down Market are two terms that, on the face of it, seem to repel each other. However, the two really make a perfect marriage. There are three good reasons to invest your Self Directed IRA funds in a Down Market.
3 Reasons to Invest Your Self Directed IRA Funds in a Down Market
Bargains: Just like a retail store going out of business, you get more for your money when a merchant is in trouble. This is what essentially happens during a Down Market – merchants (markets) are in trouble. This is good news for those who are not looking for quick returns, which is what retirement investing is all about (investing for the long haul).
As an example, let’s say you use your Self Directed IRA funds to invest in real estate. Right now, the real estate market may be cooling, but some of the best investment opportunities can be snatched up with IRA cash as many panic-stricken wanna bees decide to sit out this market. Perhaps the uneducated are waiting for the media to tell them it is OK to invest safely and securely again, who knows? However, in two or three years when the market starts to go up again, then you can unload your good finds to the uneducated investors potentially doubling or tripling your returns on investment. Your retirement account will be singing cha-ching as you pad your retirement account! It’s the perfect example of buying low and selling high. This is the genius behind investing in a Down Market.
Select the Best and Leave the Rest: More of the best investment choices are left to choose from in a Down Market. If you want to see a great return from investing your Self Directed IRA funds, you‘ll be able to pick up some pretty good investments during a Down Market.
Only the strong survive during a Down Market. You only have to look at the number of mortgage companies that have folded to see this. If you wanted to invest your Self Directed IRA funds in mortgages, now you have only the best left from which to choose.
Lessen Losses: In a Down Market, you mitigate possible losses significantly. As illustrated in the point just above, because weak firms tend to disappear during a Down Market, you will make better investing decisions. Hence, the investment vehicles you choose are those who have weathered a weak market, and are likely to produce greater returns in a strong market. For forward-thinking investors, a Down Market is a great time to maximize Self Directed IRA returns drastically.
To learn more about self directing your IRA in real estate or other assets, then contact a self directed IRA Advisor.