Secrets to IRA Success

IRAs are one of the most important tools we have at our disposal when it comes to saving money for retirement. An IRA lets you choose from a wide variety of investments. You can pay the taxes up front or defer them for decades. IRA rules make it difficult to withdraw money from those accounts before you reach a certain age, so it is easier to save the money since you don’t have fast access to it.

To be a successful IRA investor, it may be helpful to keep a few guidelines at the forefront of your mind. Making good use of these guidelines will give you a better chance at increasing your portfolio’s value in any economic climate.

  1. Diversification
    We’ve all been warned about putting all of our eggs in one basket, and this illustration works nicely when discussing retirement account investing. Experts differ on exactly what percentage of your IRA should be comprised of stocks, bonds, cash accounts and alternative assets, but most financial advisers agree that you never want to be in 100% stocks (especially if the stock is all from one company) and you probably don’t want to keep loads of cash around (via CDs, money markets or bonds) because over time inflation could eat away at your hard-earned wealth. Many retirement accounts allow for things like real estate and gold in addition to traditional assets, so there is no excuse for a lack of diversification.
  2. Timing
    Our economy moves in cycles, like the waves of the ocean. While no investor can time the market perfectly each and every time, it helps to know what caused cycles to shift in the past. One of the biggest economic indicators for U.S. investors is the Federal Reserve prime lending late. When interest rates rise, the money supply tightens. Rising interest rates have coincided with rising gold prices, falling stock prices, rising oil prices and falling bond values (because new bonds pay more with each rate hike, older bonds are devalued). Knowing how to time the market short-term is a rare skill that most of us will never master, but understanding the market’s long-term dynamics is vital for IRA success.
  3. Emotion vs. Logic
    There are very few hard and fast rules in investing, but here is one to remember at all times: do not invest based on emotion.
    Between the television, the newspaper and smooth-talking salesmen who know how to push our emotional buttons, it seems as if everything and everyone wants us to get all riled up and go buy something under the guise of investing. Warren Buffett does not subscribe to the theory of emotional investing, so why should you? Research, knowledge of the markets, timing and diversification are the things that can make you a successful IRA investor, so do your IRA investing logically, not with fear or greed as your main motive.

Conclusion
Taking the above three guidelines into consideration should provide you with a fighting chance at IRA success. The last few years have taught us to expect the unexpected. You can prepare for a wide range of circumstances if you remember to properly diversify your retirement account portfolio, do enough research to have good, if not great, timing, and never get emotional.
For more information and tips on obtaining success with your self-directed IRA call Janguard toll-free at (800) 571–6341 today or visit us online at www.IRAtransfer.com to claim your free copy of our new 2015 IRA Transfer Guide.