How to Invest in an IRA

by IRA Rollover in Gold IRA with Comments Off on How to Invest in an IRA

If you’re wondering how to invest in an IRA, you have a lot of options.  What works for one person, though, may not be right for another so you must assess your own needs and expectations when deciding how to choose assets for your IRA.

The younger you are the more aggressive you can be and the more risks you can take.  High risk/high return investments are fine when you are in your 20s and 30s but if you’re over 40 you’ll probably want to begin to be more conservative.  Be sure you are comfortable with it—if a trade would make you worried or lose sleep, don’t do it.

You can invest in any security that is publicly traded such as bonds, mutual funds, and stocks.  Many like mutual funds because it gives them a large “basket” of assets from around the world—a start-up in Kentucky, an established oil field in the Middle East, a manufacturer in Germany, etc.

Bonds can be a real asset, too, if you choose carefully.  Buying a bond is nothing more than loaning money and having it paid back with interest.  If you buy a $1,000 bond from the government, they are borrowing that money from you.  When the bond becomes due, you will get the face value of the bond plus interest accrued.  Unfortunately, government bonds aren’t paying much interest right now.  The upside is that they are considered a very safe investment.  Bonds are also issued by publicly traded companies and usually pay much high interest than government bonds.

Investing in stocks can be very lucrative if you know which ones are likely to gain value.  For example, those who invested in a little start-up company run by a kid named Bill Gates were very, very happy with the returns on their initial investment!  There aren’t too many of us that will luck into that type of stock but there are hundreds of other stocks that will help your IRA grow.  The stock market can be stressful so if you aren’t comfortable with your level of knowledge you may want to let your broker help you with your

invest in gold

decisions.

Then there are precious metals, an investment for people who want to avoid inflation, deflation and hyperinflation.  You can buy gold, platinum, silver, or palladium for your IRA and know that it will never lose value.  A dollar’s worth of gold will always be worth a dollar.  Whereas to buy the same dollar of merchandise in 2012 as you did in 2008, you would need about $1.40.  Gold and other precious metals protect you from the instability of currency.

It’s important to decide which types of assets you want in your IRA.  Depending on your temperament, your knowledge of the market, or your access to financial advice, there are many choices you can make.  But in deciding how to invest in an IRA you should definitely consider investing part of your funds in inflation-proof assets like gold and other precious metals.

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