top of page
  • Rick Pendykoski

Investing in Alternative Assets through a Self-Directed IRA

The stock market is known for its volatility. If you are a smart investor, you should look for ways to minimize the impact of market volatility on your portfolio, especially your 401k and IRA retirement accounts. Alternative investments like multifamily, give you the opportunity to diversify your retirement portfolio without strong ties to traditional stocks and bonds. Also, alternative assets can outperform traditional stocks, bonds, and mutual funds, helping you build wealth faster.

However, most big brokerage firms only provide limited options for your retirement account. If you want to take control and diversify your investments, you need to leverage a Self-Directed IRA account. As a Self-Directed IRA owner, you have the freedom to decide what investments to add to your portfolio. You make investment decisions based on what you know and understand.

Why Should You Invest in Alternative Assets?

Alternatives offer you a broad asset class that conventional retirement plan custodians do not allow. Most savvy investors use their self-directed IRAs to gain access to investment options other than bonds, mutual funds, stocks, and CDs. In a self-directed IRA, the only investments that are not allowed are collectibles and life insurance. This means a self-directed IRA with almost endless options for you to build your retirement wealth.

For real estate investors, you can use an SDIRA to invest in multifamily apartments, apartment syndications, notes, private lending, and much more.

Reasons to Invest in Alternative Assets:

  • Use and rely on your knowledge and expertise to make your own investment choices

  • Get better diversification and greater earning potential in your portfolio

  • Avoid the stress of stock market volatility

  • Gain access to a wide range of tangible assets.

  • Earn higher income in a shorter timeframe than traditional assets.

Examples of Alternative Investments Include:

  • Real estate – single-family, multifamily apartments, self-storage, office, etc.

  • Real estate notes and trust deeds

  • Private corporate debt instruments

  • Commodities and futures (like gold)

  • Hedge funds

  • Private placements (like in real estate syndications)

  • Private equity investments

  • Crowdfunding and startups

  • Structured settlements

Using a Self-Directed IRA for Alternative Investments

Self-directed IRAs are available as both traditional and Roth IRA. For self-employed professionals, self-directed SIMPLE IRAs and SEP-IRAs are also available.

A self-directed IRA allows you to invest in a wide arrange of traditional, non-traditional, and alternative investment options, which are generally not available with conventional IRA accounts. A self-directed IRA gives you the freedom to build a strong investment strategy, and take control of your investments as well as your financial future.

Why use a self-directed IRA to invest in alternative assets?

A self-directed IRA has a lot of benefits to offer, which include:

  • Holding alternative assets in a self-directed IRA has tax advantages too. In a traditional IRA, capital gains are tax-deferred, and in a Roth IRA, they can be withdrawn tax-free.

  • The ability to diversify your portfolio without correlating directly to the stock market. This helps control market volatility and minimize risk.

  • For people who don’t have immediate liquidity needs, self-directed IRAs present an excellent option as many alternative assets are held for longer periods than traditional market securities.

  • In a self-directed IRA, the funds are easily accessible for investing.


A self-directed IRA gives you the flexibility to invest in alternative investments, diversify your portfolio, minimize risk, and build wealth. In a market, where interest rates and trade wars are uncertain, investing in alternative assets through a self-directed IRA can stabilize the risk and help provide better control of your financial future.

Quick Disclaimer: This is a guest article from Rick Pendyoski of Self Directed Retirement Plans LLC. This is for informational purposes only and is not to serve as financial advice or represent an endorsement.

Author Bio: Rick Pendykoski is the owner of Self Directed Retirement Plans LLC, a retirement planning firm based in Goodyear, Arizona. He has more than three decades of experience working with investments and retirement planning, and over the last 10 years has turned his focus to self-directed accounts and alternative investments. Rick regularly posts helpful tips and articles on his blog at SD Retirement as well as, SAP, MoneyForLunch, Biggerpocket, SocialMediaToday and NuWireInvestor. If you need help and guidance with traditional or alternative investments, email him at


bottom of page