The Individual Retirement Account (IRA) has become one of
the most popular tax-advantaged investment vehicles used by Americans today. It
was recently estimated that four out of 10 U.S. households owned assets in IRAs,
accounting for over a quarter over all U.S. retirement wealth.
Moreover, eight out of 10 households have retirement savings that may
eventually rollover into an IRA.
Because IRA ownership is generally associated with higher net worth investors,
properly diversifying IRA assets has become an integral part of any shrewd
investors’ overall retirement savings strategy.
However, IRA assets must be held with a qualified custodian,
and because most custodians lack expertise in alternative investments, IRA
savings are commonly limited to traditional investment options like stocks,
bonds, or mutual funds. For this reason, most investors are surprised to learn
that the Internal Revenue Code has always allowed IRA owners to invest their tax-advantaged
assets in a broad range of alternative investments. That’s right— diversifying
your retirement plan to include hedge fund assets, private equity or other
investments in private companies is within reach. As U.S. investors continue to
seek out alternative investments to complement their retirement savings, more
custodians are expanding the scope of investments they allow their customers to
hold in their retirement accounts.
Why consider alternative investments in your IRA? One must
only look back a few years to the recent financial crisis for a startling answer.
Retirement assets suffered some of the steepest losses during the financial
crisis, in part because of the non-diversified traditional investments held
therein. Allocating retirement savings to alternative investments—like hedge
funds, private company investments or venture capital—is no longer simply
fodder for cocktail-hour bluster, but rather a sensible way to broaden asset
diversification, a proven strategy to reduce volatility in a portfolio’s
performance, and even increase the potential for higher returns over time.
The mission of Grofolio is to provide greater access to
alternative investments. Grofolio makes it easier and more efficient for all
accredited investors to find, search, sort, and filter alternative investments
to identify the best fits for their portfolio—whether the investable assets are
qualified under an IRA or not. Grofolio also offers the chance to interact with
other potential investors.
Interested in adding alternative assets into your investment
portfolio? Sign up for Grofolio now to be notified when we launch later this
(Grofolio recommends talking to a qualified tax consultant
before investing retirement assets in alternative investments).
E.g. Equity Institutional (http://equityinstitutional.com
or Millennium Trust Company (http://www.mtrustcompany.com