Investing Options For Your Retirement Account
Posted on: 28 November 2018
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Investing for your retirement can be one of the most stressful and confusing things you can do. This is especially true for people who are not financially astute and who might not know that much about investing. There are so many different types of financial instruments that you can invest in, from bonds and stocks, to precious metals and other esoteric investments such as REIT's and foreign companies. So, if you are someone who hasn't spent their life reading the financial papers, and you're not glued to CNBC, then you probably want some sort of assistance. This article will help you with a few ideas for your retirement account. You can read up on the following ideas and decide which works best for you, or what sort of combination would be best.
The Conservative Approach: Index Funds
If you are someone who likes to invest with a conservative approach, and are hesitant about putting money into anything risky, you should stick to an index fund. These are great because they cover the entire market. They are tied into large stock market indexes such as the S&P 500 and will track the results of the market as a whole. This means that if any particular company crashes, it won't kill your entire savings. This is why people advise against investing in a single company with all of your savings. An index fund is spread out so that there is much less risk.
Speculative: Sector ETF's
If you are feeling like an index fund is a bit boring, and you want to have a bit of an input into your investing and feel that investing in a broad index fund is a bit too spread out, then you should look into a sector specific ETF. These are designed for people who want to invest in a particular sector, such as consumer dependable or tech stocks. The benefit to choosing an ETF is that it's a group of stocks, so again, you don't have to worry as much that a single stock will drop and you'll loose all your money. There is the likelihood of a sector hitting a slump, such as banking stocks or medical stocks all taking a downturn, so it is important that you understand that sector specific ETF's are more risky than a broad based Index fund.
Hedging Against Catastrophe: Gold and Precious Metals
Another cool idea would be to invest in gold and precious metals in your IRA portfolio. You can consult a portfolio service and have them tell you all about the investing options that you have when it comes to gold. The reason that many people like to invest in gold IRA portfolios is that gold is one of the more prized items when there is a serious economic downturn. So, it's considered to be one of the better hedges against a really big economic recession or, worse, a depression.