Andrea Coombes, whose stories on retirement, investing, taxes and other topics have appeared in the Wall Street Journal, MarketWatch, San Francisco Chronicle and other outlets, recently wrote an article on an investing strategy for the bold-hearted. Her piece, “Self-Directed IRAs: An Option for Expert Investors,” sheds light on the benefits and risks of self-directed IRAs.
Coombes spoke with McManus & Associated Founding Principal John O. McManus for his take. From the story:
The two main reasons investors take on the risks of self-directed IRAs are higher expected returns and the opportunity for diversification.
“If you understand investments, particularly in certain segments, you can take advantage of higher yields and maybe less volatility,” says John O. McManus, who has invested in real estate and other assets through a self-directed IRA for about 15 years. McManus founded the estate-planning firm McManus & Associates in New York and New Providence, New Jersey.
His self-directed IRA also lets McManus invest in companies that aren’t publicly traded, which “a mutual fund will not allow you to do,” he says. But, he warns, “This is not a game for the unsophisticated.”
Head over to NerdWallet to learn more about the advantages and drawbacks of self-directed IRAs. For guidance on your overall wealth management strategy, contact McManus & Associates at 908-898-0100.