5 Tips for Making the Most of Your Self-directed Investment

A self-directed IRA can be an amazing way to make the most of your retirement planning, but it’s not a wholly foolproof approach; if you don’t do your homework and put in the proper effort, you’re going to come out behind what you would with a more traditional, hands-off arrangement. To make sure you’re a winner in the long term, you should keep these five tips in mind as you cultivate your IRA:

1) Do your homework

It’s important to walk in with your eyes wide open from the very start; it’s simply not worth it to throw money away ‘learning the ropes’ when you can learn much of what you need to know by patiently researching and educating yourself. If you need to get your feet wet, start off playing it as safe as humanly possible.

2) Work with a respectable firm

With a self-directed IRA, you’re the one calling the shots, but that doesn’t mean you shouldn’t pay any attention to who you’re working with. A proper self-directed IRA provider can help you in a multitude of ways, from educating you to easing the processes involved. It’s all too easy to fall into the trap of assuming that since you’re the decision maker, the facilitator is irrelevant — don’t.

3) Adjust for your age

Investments for your retirement shouldn’t be the same for a 20-year-old and a 60-year-old; the landscape and the opportunities vary wildly depending on how soon you need your money. Generally speaking, younger investors are advised to take more risks and seize more tenuous opportunities than investors nearing their retirement. It’s one thing to suffer a setback when you have 40 years to recover, another entirely to suffer a major setback a few years before you become dependent on your investments.

4) Stay on top of your investments

Even if you’re making investments that aren’t particularly agile, it’s important to stay on top of them at all times; if you want fire-and-forget investment, a self-directed IRA isn’t the right choice for you. Be proactive, be informed, and be ready to make necessary changes when you can and sit on your hands when you must.

5) Stay on top of the news

To make smart investments for your future, you can’t be uninformed. You need to know everything coming down the pipe, whether it’s directly or indirectly related to your investments and investment opportunities. A well-rounded knowledge of world events gives you a well-rounded basis for investment.

This post was written by Keith Marsh, Senior Partner of Specialized Trust Company.