In recent years, as investors have moved to diversify assets and seek greater control of their investments, self-directed retirement accounts have started gaining attention.
One of the more prominent options is the Self-Directed IRA. This individual retirement account allows a wide range of investment options outside of the traditional stocks, bonds, mutual funds, and CDs. With a self-directed IRA, the gates are open to alternative investments vehicles including Regulation A+, D, and CF offerings, real estate, gold and precious metals, debt instruments such as tax liens and loans, cryptocurrency, private equity, and more.
Let’s take a closer look at three of these alternative investment options.
Regulation A+
Reg A+ allows the general public, not just accredited investors, to invest in private companies. For non-accredited investors income and/or net worth limitations apply to the amount that can be invested. Companies that want to conduct Reg A+ offerings must file a form 1-A with the Securities and Exchange Commission (“SEC”). Upon qualification of the 1-A by the SEC, a company can commence the offering. With Reg A+ offerings, the public now has access to start-ups and their high growth potential. It also allows individuals to invest in small companies they believe in and want to see succeed.
Regulation D
Unlike Reg A+ offerings, which allows both accredited and non-accredited investors to invest, Reg D allows investments only from accredited investors. Additionally, there are no pre-offering SEC filing requirements for companies conducting offerings pursuant to Reg D.
Investment opportunities for individuals in the Reg D sector can include “preferred stock, limited partnerships interests, membership interest in a limited liability company, or an investment product such as a note or bond.” (Investor.gov)
Regulation CF
Another self-directed IRA option is a Regulation CF offering.
“Before crowdfunding, small investors were blocked from ever buying shares in these small companies and could typically only get in when the company was publicly traded and it was too late,” states IRA Services Trust. “In the past, only venture capitalists could get in at the beginning of Google but now these types of opportunities will be open to regular investors.” (IRA Services Trust)
Self-directed IRAs allow a wide range of alternative investments depending on your risk tolerance, needs, interests, and capital. Depending on the type of investment, tax benefits may also be provided in certain instances.
With a self-directed IRA, how much you want to diversify your assets is up to you. One thing is for certain—there are more options and opportunities for investing than ever before, giving investors more freedom when it comes to creating a retirement account that’s right for them.
As always with any investment, note that all investments have a risk of loss and there are no guarantees of future performance.
Want to learn more about self-directed IRAs and if they’re right for you? Contact Boustead Securities by phone: (949) 502-4408 or e-mail: info@boustead1828.com.
Comments