Opportunity and Diversification
Portfolio diversification can be the greatest hedge against extreme fluctuations in the markets. Even though we are experiencing a 10-year bull market, individuals continue to further diversify their portfolios with the addition of non-publicly traded Alternative Investments.
Educated investors have learned that they can take advantage of new investment opportunities offered through private markets by using IRA funds for real estate, private equity, private placement, promissory notes and trust deed investments.
Forge Trust specializes in the custody and administration of unique Alternative Investments, held in IRA investment accounts, that provide for tax-advantaged appreciation and growth.
Why Alternative Investments?
Large institutional investors have been capitalizing on alternative investments for years and now you can too.
Forge Trust provides you with the control to select and direct your own IRA investments. With our custodial services and your self-directed IRA, you can decide how your money is invested, either through alternative assets, traditional assets, or a combination of the two.
What Are Alternative Investments?
An Alternative Investment refers to an investment beyond the traditional stocks, bonds, and mutual funds. Alternative investments can bring significant benefits to an investor’s portfolio through added diversification.
Alternative investments include Real Estate, Private Equity, Private Placements, Precious Metals, Commodities, Promissory Notes, and Equity Crowdfunding.
Forge Trust custodies and administers these investments to preserve the tax advantages status of the IRA account and assets.
Types of Alternative Assets
Real Estate
IRA funds may be used to invest in a wide variety of real estate including vacant land, farmland, residential, commercial or vacation property. Investors often choose to invest IRA funds in real estate because it is a familiar and tangible asset that can offer long-term appreciation or supplemental income during retirement.
There are strict rules and guidelines regarding the use of IRA funds for real estate as it must be strictly used as investment property. You cannot use IRA funds to purchase a private residence, a family vacation home or a property intended for use by a disqualified person.
Private Equity
Self-directed IRA investing allows individuals to be opportunistic and invest in startups, early stage or growing companies that are raising capital. Privately held companies may offer stock to employees or through private placements facilitated through private equity firms and certain online marketplaces.
Precious Metals
Certain gold, silver, platinum and palladium coins and bullion can be held in IRAs. IRS rules require a custodian to annually report on the value of assets held in the IRA and since the precious metals require highly secure storage, the investor must a depository for safekeeping of the IRA-owned metals. Forge Trust has formal relationships with several depositories offerings its clients a choice of storage facility.
Equity Crowdfunding
Crowdfunding platforms give investors access to private stock in up and coming startups. Investors can use their IRAs, 401Ks, and other retirement plans to fund virtually any crowdfunded venture.
Promissory Notes & Trust Deeds
An IRA account owner can act lend money to any unrelated individual or business. The IRA account owner and borrower determine the terms of the loan including interest rate and payment schedule. All principal and interest payments are paid directly to the custodian on behalf of the IRA. Loans may be unsecured or secured by real estate or other collateral.
Private Placements
Traditionally, hedge funds, offshore funds, funds of funds and private REITs are considered to be Private Placements. Private Placements are regulated by a series of SEC rules known as Regulation D or Reg D offerings.