Back to Blog
Alternative assets, as they relate to an IRA, are investment types that are not typically available through traditional IRA custodians or brokerages. Examples of alternative assets that can be held in an IRA include real estate, private equity, and precious metals.
Investing in alternative assets within an IRA can offer several benefits. For example, real estate can provide rental income and potential appreciation in value, while private equity investments can offer the potential for high returns. Precious metals can also serve as a hedge against inflation and currency fluctuations.
However, investing in alternative assets within an IRA also requires more active management and due diligence than traditional investments like stocks and bonds. Investors must ensure that their chosen assets comply with IRS regulations and do not violate any prohibited transaction rules. Additionally, certain alternative assets may require specialized knowledge or expertise to manage effectively.
It’s important to note that not all IRA custodians or brokerages allow for investment in alternative assets. Investors interested in holding alternative assets within an IRA may need to open a self-directed IRA with a custodian that specializes in alternative asset management. Additionally, self-directed IRAs may have higher fees and administrative costs than traditional IRAs, so investors should carefully weigh the potential benefits against the associated costs and risks.
