Stocks, Bonds and Annuities

• Because most IRAs are sold through stock brokers or financial advisers, the typical investments found within IRAs are individual stocks, bonds, exchange-traded funds (ETFs), mutual funds and annuities. These investments work well for most people because of the wide variety available and their ease of purchase. Thousands of stocks and ETFs are sold on exchanges daily. Through a brokerage firm, you have access to a plethora of bonds, a number of annuities and thousands of mutual funds that can fit your investment style and risk tolerance.
  
  

Real Estate

• If you have a self-directed IRA, real estate is an alternative to the typical IRA investments. One benefit of investing in real estate is that the return of the real estate market does not always correlate to the returns of the financial market. Some examples of allowable real estate investments include residential real estate, such as apartments, single-family homes and duplexes; commercial real estate; undeveloped land' mortgages and deeds of trust. When purchasing real estate within your IRA, however, it must be from an unrelated party. It cannot be purchased from yourself, a close relative or an entity in which you have a controlling interest.
  
  

Precious Metals

• An investment that some investors use as a hedge against inflation is precious metal. Gold, silver, palladium and platinum can be purchased within a self-directed IRA. You have a couple of options about how these metals can be held in the account. You may purchase the physical metal (coins or bars), or you may purchase an ETF that tracks the price of the precious metal. If you purchase the metal, it must be held by the trustee of your IRA.
  
  

Other Options

• Additional options for self-directed IRAs include oil and gas interests, foreign currencies, equipment leases, private partnerships, limited-liability corporations, C-corporations, promissory notes and loans to private corporations. Because many of these options are more rarely held within IRAs, it is important to find a self-directed IRA custodian that can hold these types of investments within your account. Discussing these investments with a financial adviser and/or certified public accountant before purchasing them to ensure they are tax-qualified and meet your financial goals.