How to Invest in Futures and Commodities Using a Self Directed IRA

Almost anyone who owns some type of self directed IRA can benefit greatly from investing in futures and commodities. Usually, it’s just a matter of which ones to invest in. For this reason, you will need to speak with a tax accountant or a lawyer before you make any type of investment. These professionals can provide you with appropriate advice and guidance and can help you to select only those ventures that are worthy and that are right for you. In addition to getting the proper legal and/or financial help, you will also need to be familiar with the terms of your bank or financial group.

Most financial groups will let you invest about 70% of your IRA balance in futures and commodities.  Though it is possible to find groups that will allow you to invest much less than this, you’ll rarely find one that allows you to invest more. This isn’t to say that you can’t make other smart investment choices with your remaining money. You can, in most cases, make liquid investments with any money not being used for futures and commodities.

You should also know that, with most companies, the money in your IRA will be subject to what is known in the financial world as “calls.” These calls, which are administered by your broker or the futures commission merchant, will issue a charge to your account. If you don’t have enough money, your investment will be sold. For this reason, it is important that you always know when calls are going to happen and that you know, at all times, how much money is in your account.

Your financial institution will send out statements. Most send on a quarterly basis, though you should check with your institution. You can find information about statements by speaking to your broker or by calling your financial group. In today’s increasingly virtual world, most institutions offer statements online for your convenience. Any questions or concerns that come up as you complete your futures and commodities applications or as you work with your broker will need to be directed to the broker. The financial group will not usually handle questions of this sort or provide any type of financial advice.

As you can see, you’re on your own much of the time when you invest in futures and commodities. This does not mean, however, that they are an unworthy venture. In fact, it’s usually quite the opposite. The key, though, is to find a good and reliable broker who you can trust and who is easily accessible at all time. Having competent legal and financial aid is also important and can keep you from making poor decisions. As long as you handle the process carefully and responsibly and research any action you take, you should benefit immensely from futures and commodities investments. Just remember that you can’t rely on your financial group to do any of the tough work for you. That’s just not their job.

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