With the average person working well over 40 to 50 years in their life, they set aside a small amount of funds for their retirement. To ensure a better retirement, many individuals place their savings into retirement funds, allowing them to gain profit on the savings they make and thus enjoy a better retirement.

A self-directed Individual Retirement Arrangement (IRA) is one of the many arrangements people make for their retirement. It allows them to have greater control over their retirement fund, allowing them to shape their retirement as they will. Here is a closer look at self-directed IRAs and why they may be your key to a better, safer and comfortable retirement:

Benefits

Gain Greater Control over Your Future

As the name suggests, possibly the biggest benefit of self-directed IRAs is the account owner can direct their funds into any securities they want. As a result, they gain greater control over their risk, returns and, evidently, their future. This helps them choose securities and investments they know about, thus providing a host of benefits, such as greater return and control.

They Offer Greater Returns on Savings

Unlike regular retirement funds, where the account manager has control over the investments, self-directed IRAs give the owner greater control of them. As a result, they can expand or shrink their account’s investment portfolio. By doing so – directing greater investment in certain securities – account owners can acquire greater returns on their savings.

They Diversify Your Investments

With the ability to direct your retirement fund into a specific or broad range of securities, self-directed IRA owners can diversify their investments and thus hedge their risks against poor performing securities or market problems. As a result, their retirement fund continues to grow, even if a security underperforms.

Limitations

It’s as Risky as It Is Beneficial

While they may provide greater profitability, self-directed IRAs still follow a major underlying financial principle: the greater the risk, the greater the return. As such, while it does give the account owner the ability to earn greater returns on their savings, it also opens him up to greater risk and thus greater loss.

Your Investments Doesn’t Allow Ownership

While they may be highly beneficial, they do not allow you to own a company, home or certain other securities. For example, if an owner directs a significant portion of their funds into a small company, they cannot own it through the IRA.

It’s Not for Everyone

In truth, a self-directed IRA is not for everyone. If you do not have the expertise to choose securities, it is better you stay away. Moreover, certain prohibited transactions are prohibited by the IRS – make sure you do not plan to invest in them before acquiring a self-directed IRA.

They allow you to hedge your risk, improve your returns and/or allow you to better shape your retirement. As such, self-directed IRAs can be one of the best choices you make for your retirement, provided you know what you are directing your investments into.

Market Place

MKTPlace is a leading digital and social media platform for traders and investors. MKTPlace offers premiere resources for trading and investing education, digital resources for personal finance, news about IoT, AI, Blockchain, Business, market analysis and education resources and guides.

Jesse Livermore, who is thought to be the grandfather of stock trading, was born in 1877 and died in 1940. Although Jesse traded more than 100 years ago, the principles he used for trading at the time are still practiced firmly by many of the legend’s followers today. He was an ordinary American citizen who rose to riches through trading and also saw his share of multi-million dollar losses.

‘Boy Plunger’ was the nickname given to him early in his life when he started his journey towards a successful future as a trader through various bucket shops, which is another name for gambling houses. He used to trade there and started at the tender age of fifteen. When Livermore turned 40, he already had a $100 million fortune which in today’s terms can amount up to $6 billion dollars, a staggering amount. And he rose to fame when he shorted the market in 1929 when the entire US stock exchange was crippled.

The Trading Style of Jesse Livermore

Jesse was an active and successful trader in the US even before the great spike and plunge of the US economy. The Civil War, having been long over, people still remembered it. However, it was also era of great industrial development in the US at the time which presented a great deal of opportunities for smart traders and businessmen. It was at this time that America rose to becoming a safe haven for all who needed shelter and food.

This induced a massive influx of settlers who chose to escape the endless hardships of the Old World to embark on new beginnings through hard and honest labour. And this is what Jesse Livermore loved and the sort of environment he chose to invest in. He got involved with people like Henry Osborne Havemeyer, the owner of American Sugar Refining Co, along with the owner of the National City Bank, which has become Citigroup today, E.H. Harriman, the master of the railroads, J.P. Morgan legendary banker and the founder of Standard Oil, William Rockefellar.

He was rolling with all the big people responsible for developing these booming industries. Livermore was familiar with each and every industry, from coal to coffee, to sugar and the world of banking, which meant he had a tremendous amount of knowledge and information available to him at any given time.

Yet with all that knowledge, Livermore was convinced not to anticipate anything in the market and chose to be patient and let things swing in the way his knowledge enabled to predict and believe that it should and it did, so he did what he did best: invested in a bullish market and shorted in a bear market.

However, Livermore’s personal life was not as successful as one might imagine. Having endured three unsuccessful marriages he was also stricken with clinical depression which had been with him for a long time. And this is what led him to taking his own life in 1940.

The Grandmaster’s Principles in Momentum Trading

Although Jesse Livermore was active along time ago, trading in commodities and stocks, making millions. Believe it or not, the methods and principles he used are not so different from today’s financial world and just as legitimate. Jesse Livermore used to say a successful trader never acts on his own instincts until the market has deemed his instincts correct. If you try to understand the meaning behind what Livermore was talking about, it would do you good to remember you are in the market to make investments and not to form prophesies.

And many of the successful traders today follow in Jesse’s footsteps, which is not to anticipate but to follow the markets to a more fruitful return. The maestro also used to stress on the fact a trader can never buck the stock market, because there is never anything new. However, there are always variations of the same patterns, insightful for a man who traded 10 decades ago.

Livermore also emphasized on the fact one should never trade when he is unsure of the opportunities in the market, learn to hold money. This means all good trades need time and a lot of patience and greed is the worst enemy of a trader. All in all, Jesse Livermore’s wisdom still carries out, even today where everything is modernized in the world of stock, hedge funds and ETFs.

Market Place

MKTPlace is a leading digital and social media platform for traders and investors. MKTPlace offers premiere resources for trading and investing education, digital resources for personal finance, news about IoT, AI, Blockchain, Business, market analysis and education resources and guides.