Investing in Hedge Funds With Your Self-Directed IRA
Hedge funds are a complex investment fund that uses the concept of trading liquid assets. The fund constructs intricate techniques and risk management strategies to help improve portfolio performance. Typical techniques involve leverage, short selling, and derivatives. They almost always have a fund manager. Although designed for the more experienced and accredited investors, these investments are allowed in self-directed retirement plans.
Self-directed IRA investors can use account cash to purchase shares. Investing can provide the account holder with a tax-sheltered retirement income and returns. It also offers widespread diversity for their retirement portfolio.
Hedge funds are typically made available only to sophisticated and accredited investors. Except in limited circumstances, they cannot be offered or sold through general advertising. They are subject to regulation by the US Securities and Exchange Commission (SEC) and/or the appropriate state securities administrator. Investors should retain independent financial and/or legal counsel to evaluate the risks and merits of investments in any fund before investing.
The SEC recently expanded its definition of an accredited investor. Learn about new qualifications for accredited investors.
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Benefits of Investing in Hedge Funds With a Self-Directed IRA
- Self-directed IRAs provide tax-sheltered retirement income on returns and investments.
- Hedge funds can add diversity to retirement portfolios.
- Unlock your IRA from the traditional investment options of stocks and mutual funds.