How are you feeling about your retirement investments? The S&P 500 index (a stock market index that tracks the stocks of 500 large-cap U.S. companies) is up almost 25% year-to-date (since January 1, 2019.) The current bull market is a little over ten years old while the average bull market lasts about 4.5 years. Some investors are wondering how much higher it will go before the next CORRECTION? (A decline of 10% or greater in the price of a security asset, or a financial market.) If you are retired or approaching retirement, you may be considering taking some profits in your IRA to protect a portion of your portfolio from the next dip.
Alternative investments are an option to conventional stocks, bonds, and mutual funds. If you meet the criteria, you might consider looking into alternative investments that have what is called a reverse correlation to the market. This means, when the market goes down, these investments will typically go up. It is not advisable to put all of your money into alternative investments as they are usually less liquid (easily converted into cash) than actively traded securities. However, many alternative investments will provide cash flow that can be used as income or reinvested a predictable rate.
Taking year-end profits in a taxable investment account may result in taxable income, but selling securities inside an IRA and reinvesting them into less volatile (rapid and unpredictable changes in value) alternative investments can help smooth out the ride without any tax implications.
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Roger Walker is a financial advisor with Walker Wealth Management, LLC and Centaurus Financial, Inc.
This article does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation of any security or any other product or service by Walker Wealth Management, LLC, Centaurus Financial, Inc. or any other third party regardless of whether such security, product or service is referenced in this article. Furthermore, nothing in this article is intended to provide tax, legal, or investment advice and nothing in this article should be construed as a recommendation to buy, sell, or hold any investment or security or to engage in any investment strategy or transaction. Walker Wealth Management, LLC and/or Centaurus Financial, Inc. do not represent that the securities, products, or services discussed in this article are suitable for any particular investor. You are solely responsible for determining whether any investment, investment strategy, security or related transaction is appropriate for you based on your personal investment objectives, financial circumstances and risk tolerance. You should consult your business advisor, attorney, or tax and accounting advisor regarding your specific business, legal, or tax situation.