The Ups and Downs of Investing

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Value fluctuations are a reality for any asset class. Price movements in alternative investments can impact your self-directed IRA and may catch your attention, so let’s examine the possible ways that you, as a retirement investor, could address the ebb and flow of the broader markets that may translate to your account’s holdings.

Your IRA Assets Increase in Value

  • As your account increases in value, you’re positioned to enjoy the fundamental benefit of self-directed retirement investing – By adopting an alternative asset strategy with your IRA, 401(k), or other such account, your investment earnings won’t be taxed (capital gains, income, etc.) in the same manner as a personal, non-IRA investment. If your account holds income-producing assets like rental properties or promissory notes, your profits can be fully re-invested into new assets having not lost a percentage to taxes.
  • If you’re at or above the age of 70 ½ and you hold a pre-tax account like a Traditional IRA, assets that generate liquid funds can also help satisfy your annual required minimum distributions. You can maintain your full portfolio of alternative IRA investments by distributing cash on hand instead of liquidating a portion of your assets. Making withdrawals from your IRA cash pool may also prove easier than distributing the assets themselves, though you certainly have the option of doing so.
  • When non-cash producing assets—precious metals or private equity positions, for instance—increase in value, you can sell your holdings and retain your tax-advantaged earnings or continue to hold them. The power of self-direction lies in your ability to follow the markets that match your comfort level and make the decisions that suit your needs along the way.

Your IRA Assets Decrease in Value

  • Lower asset values can present an opportunity to accumulate additional such assets at a discount, though this largely depends on the investment class and the conditions surrounding the decrease. New Direction Trust Company does not provide market analysis, nor do we recommend or endorse any particular course of action. Consult with a financial advisor if you believe a price dip may represent a buying opportunity.
  • Sometimes values in a particular asset class will rise in tandem with a decline in another. With control over your retirement, you can decide to pull your funds out of a struggling asset and apply them toward something with a more convincing uptrend.
  • As previously mentioned, you may distribute your IRA assets in kind, meaning you would receive the asset itself as your personal property and pay taxes (if applicable) on its fair market value. This would allow you to retain your asset, possibly sell it for a higher price down the road, and pay lower taxes on your distribution in the meantime.

It can be beneficial to maintain a long view when investing for the future. However, IRAs have a time element that personal investing may not. When you’re age 30, you have many years to potentially recover if your retirement assets fall. You may not have that same luxury at age 60. Progressing through your financial lifecycle may warrant ongoing consideration of your risk/stability balance. As such, it can pay to weigh your full spectrum of financial circumstances when thinking about re-directing your retirement plan.

With this in mind, remember that self-directed investing empowers you to evaluate every available option and adjust your approach whenever you deem fit to do so. You can manage your account online and 24/7 at myDirection®, give us a call at 877-742-1270, or send us an e-mail at Please don’t hesitate to contact us if you ever have questions or concerns.