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Why open IRA account at the brokerage firm in 2012? It's safe and it's one of the best places for IRA.
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The purpose of traditional individual retirement account (Traditional IRA) and many of its variations (ROTH IRA, 401K, SEP IRA,
SIMPLE IRA, etc) has always been to be a safe place for people to save and grow their nest egg, which will be used in their retirement years.
There are three main sources for retirement accounts: employer, bank and brokerage company. We believe that employers, when they
offer some kind of matching contributions, are often the best place to keep IRA.
Bank IRAs are the safest places for retirement accounts. Not because something could happen with your retirement account at employer or
brokerage firm - they both have an equivalent of FDIC insurance. But because banks usually don't provide customers with easy way to invest in
risky assets, like stocks. This way people are safe from wild market crushes, company bankruptcies and, most importantly, from themselves -
human irrational emotions of fear and greed, which often lead to financial ruin.
But the world is changing very fast and new challenges arise. Now we have to be concerned with what would happen if dollar
is going to devalue due to unsustainable debt in US economy. Or what would happen if Eurozone was to collapse. The old prudent way of keeping
cash in a safe place might turn out to be disastrous in that case - it offers no protection for your money in inflationary environment.
For this reason, we believe that the best, safest source for IRA could be brokerage account. It allows a flexibility of quickly moving
between various investments and cash. If a sudden inflationary news were to come out, cash could quickly be moved into precious metals ETFs,
inflation-protected bonds or other assets. This is usually not possible with bank or employer-maintained IRA.
Of course, the downside of brokerage IRA is that account holder will be tempted to invest or even trade stocks or other assets they don't
know much about. This could be the most common way people loose their hard-earned money in the US.
Being very disciplined, careful, educated and maybe
even hedged with ones investments is paramount. We can't stress enough how important is to know exactly what one is doing in this area. The
price of making uneducated, rush, emotional decisions could be your life savings.
Remember - don't gamble with your retirement savings and always have a clear exit strategy.
Related article: Best IRA brokerage firms in 2012
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