IRA Rules for Investing

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The rules for IRA investing dictate that investments should be practical, such as stocks, bonds and mutual funds. Avoid triggering tax consequences from the IRS due to poor investment decisions with advice from an investment consultant in this free video on investing.

Part of the Video Series: Investment Advice
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Video Transcript

Have you been squiring money away in IRA for years and wondering really what you can invest your money in at this point? Hi I'm Roger Groh with Groh Asset Management and we're today to talk about the rules of what you can buy or not buy within an IRA. Generally a good rule of thumb is, it has to be practical. Meaning it can't be a pierced back investment. So stocks fine, bonds fine, mutual funds fine, ETFs fine. When you start getting into other things, private investments or maybe some real estate or going short maybe not fine. Now there really aren't many written rules on what you can do but what will happen is the Internal Revenue Service would look at your portfolio and they may disqualify an investment. That could trigger tax consequences for you. So it's something to consider, just be very practical and generally conservative when it comes time to an IRA. How can you protect yourself? Well if you are considering investing in real estate or a marginal type of investment, if you find a custodian who will permit you to do that, get a letter from the custodian saying that it's OK by them if you go forward with this. Get their council to review that letter. That way you've had somebody tell you that it's OK to do it. That should make you feel a little bit more comfortable, make the IRS feel more comfortable and let you sleep at night. But generally, be careful, be conservative, think long term. That's a little bit about the rules of what you can do when it comes to investing in IRAs. I'm Roger Groh.


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