Diversifying your portfolio with alternative assets in a Self-Directed IRA (SDIRA) is a great retirement strategy for those looking to minimize unwanted risk while still being able to generate a sizable nest egg for retirement. For those that would rather park their money in a more tangible investments, like real estate or a promissory note, SDIRAs provide an option to invest outside on the stock market. As more private assets become available, more investors are seeking out alternative investment options that may fit better with their financial goals and beliefs.
With almost endless possibilities available to SDIRA holders, figuring out the right investments for your portfolio might seem overwhelming. From rental property to tax liens to start ups and more, there’s almost too many to imagine – and there’s more and more opportunities every day! Here are the hottest top 5 investments for 2022, so be sure to have them on your radar as you move through the new year!
Watch Small Businesses and Startups
Although it’s difficult to find anything positive about the pandemic, one silver lining is that many wishful small business owners finally made the move into entrepreneurship. Despite having one of the worst health catastrophes in history, startup business activity grew in America during COVID, with small startups growing from 3.5 million in 2019 to 4.4 million in 2020 according to the US Census Bureau. And the trends don’t seem to be shifting! As more and more people create these small businesses, more private investment opportunities become available. In this type of investment, the SDIRA holder can hold company shares in their self-directed account with all dividends returning to the account when paid out. This is a great option for investors who prefer to be passive! Plus, the ability to place funds into a company that is local or that aligns with their personal values can serve as benefit that private assets can’t provide.
Buy Real Estate
It’s no secret that real estate is hot, hot, hot right now! Across the country properties big and small are getting snatched up almost as soon as they hit the market. Luckily, real estate is one of the most popular private assets you can hold in a Self-Directed IRA. With competitive prices becoming more common, holding some type of real estate in your SDIRA can be a surefire way to generate a large profit. Single family rental property or fix and flip rehabs are great for active investors. For those wanting to be more passive, multifamily can be a great option.
Join the Cryptocurrency Market
One of the fastest growing private investments is crypto, and self-directed IRA custodians are allowing this investment more and more every day, adding to its increasing popularity. Although Quest has never offered this type of investment in the past, cryptocurrency changes are coming in 2022! Alongside ErisX, SDIRA holders at Quest will have the ability to hold Bitcoin, Litecoin, and Ethereum in their retirement account. As this private investment gains popularity at an extraordinarily fast pace, we’re making it our goal to ensure Self-Directed IRA investors are aware this option is available to them!
Consider Private Loans
Using a Self-Directed IRA to position yourself as the bank is one of the best retirement strategies for busy investors and those who like to have a more hands-off approach when real estate investing. Private loans can be secured by real estate or personal property, and this type of investment can give lenders an added level of security when loaning their retirement money. In the past few years, banks have fluctuated in the amount of loans they have given out, and with that number being uncertain for 2022, private loans are a great alternative investment to consider this year.
Invest in Oil and Gas
The last private investment you can self-direct in 2022 is oil and gas. Investing with an energy resource company can have its risks, but long-term investments in the oil and gas industry can be highly profitable. Oil and gas investments typically pay out dividends which result in regular income back to the accounts holder’s Self-Directed IRA, making them attractive options to many. Although oil prices fluctuate, the reward may be worth the risk.
With all the growing options available to you, 2022 is the year to invest in yourself by finding the best alternative option to self-direct. If you’re looking to branch out and move away from what’s publicly traded on the stock market, we want to talk to you and help provide more information! For more about self-direction, visit our Education Center for helpful webinars and additional entries like this one. Our Certified IRA specialists would be more than happy to speak with you, schedule a free on-on-one consultation today!