Benefits of Daydreaming to Achieve Risk and Return Goals
Day dreaming can be very productive. Where do you want your investments to be in ten years? Are you planning to retire by then? Will you need to send a child (or more than one) to college during that timeframe? (check yes here for me!) Are you dreaming about just feeling confident in your investments?
Whatever your goals might be, as investors we all have one thing in common – we want to have more money at the end then when we started. But with many experts forecasting a choppy, lower-return market over the next 5-10 years, investors are seeking out new ways to achieve growth and diversification in their portfolios – so their goals don’t have to go on the backburner.
If you count yourself in this category, there’s a strategy that you may not know about, and yet it’s been available to investors for years. That strategy is using a tax-advantaged IRA account to invest in private equity investments, and it’s a compelling option in today’s market environment and beyond. Here’s what we are seeing at PENSCO:
- Private equity investments offer diversification versus traditional asset classes like stocks and bonds, which can be beneficial in down markets when highly correlated assets are all going south together.
- Private equity allows investors to stretch further from a risk and return perspective. They may not all be facebooks and YouTubes, but even some of the less famous opportunities have paid off huge for the investors who bet on them.
- Holding private equity in a tax-advantaged IRA account makes your returns work even harder because they’re not being eroded each April 15th. Private equity investors are in it for the big wins, and allowing those wins to grow tax-deferred (and potentially be withdrawn tax free, in the case of a Roth IRA) is an enormous advantage.
- With the advent of tools like crowdfunding platforms, it’s easier to find and vet new private equity opportunities. Gone are the days where you had to be a Silicon Valley player to identify the next big thing – these platforms are truly democratizing the private equity space.
At PENSCO, we’re at the forefront of helping investors take advantage of these new, timely opportunities in the private equity space. If you’d like to learn more, join our on-demand webinar to get a comprehensive look at how this strategy can help put your investments on the right track to meet your future goals. Here’s to hoping daydreams can come true!
This Blog does not provide investment, tax, or legal advice nor does it evaluate, recommend or endorse any advisory firm or investment vehicle. Investments are not FDIC insured and are subject to risk, including the loss of principal.