When Pigs Fly – How to Invest Your Self-Directed IRA in Livestock

Are you aware that you can invest in a pig with your IRA?

You might say that I’m full of it, but you would be wrong. It is entirely possible to invest in a wide variety of alternative investments with your IRA if you understand how self-directed IRAs work.

In 1974, legislation was enacted to allow people to save for their retirement in a tax deferred manner. This was the creation of the individual retirement account (IRA). In this legislation, the rules stated that investors could invest in virtually any investment withstanding a few exceptions.

The vast majority of the investing public is not aware that they are allowed to invest in alternative investments outside the stock market. Even fewer are actually investing in these alternative investments. Examples of these alternative investments are: real estate, tax liens, private mortgages, horses, livestock, private companies or franchises, oil and gas LPs, intellectual property and more.

There are only a few limitations as to what investors cannot invest in with their IRA:

  • S- Corporations
  • Life Insurance
  • Collectibles

This opens your world up to a wide range of possible investments to choose from. This will allow you to “invest in what you know“, as Peter Lynch was famous for saying. While you can invest in a lot of different asset types, you should still focus on what you know best. Diversification is important, but so is investing to your strengths.

As of 2014 only 37.6% of American Households have an Individual Retirement Account. More than 80% of those people are not aware that they can self-direct their retirement through a self-directed IRA. The biggest hurdle to investors exploring their options is knowledge. While the rules are the same for self-directed IRAs and IRAs that invest in publicly traded securities, it can be more difficult to adhere to the rules.

4 Quick Steps to set up a self-directed IRA

  1. Find a self-directed IRA custodian that supports alternative investments. Not all custodians are prepared to handle these types of transactions. If you have an IRA held at a financial services firm which invests in stocks or mutual funds, it is highly likely that they won’t be a good fit to provide custody for your rental property. Here is a list of Self-Directed IRA custodians to speed up your search.
  2. Chose your investment – Choosing the appropriate investment is one of the most important parts of investing. Chose investments that you are an expert in and do your homework before you invest.
  3. Risk Management - Before you invest in any asset, whether it is a stock, bond or a horse, make sure you fully understand what you are investing in. If you do proper due diligence, you will mitigate a lot of mistakes.
  4. Maintenance of the investment - Once you invest your capital into the asset, you will need to monitor the investment to ensure its performance. There are a number of tasks that need to be tended to periodically, so make sure you are aware of all the rules pertaining to self-directed IRAs.

Next time you are looking for investments, and the stock market has an unappealing valuation, go hog wild and find an alternative investment that suits you. Invest in what you know.

Better Market Timing Increases Profit Potential

Trading the markets, whether it be the Stocks, Futures or FOREX, provides the opportunity to make profits by taking a position in the correction direction.

The idea is to buy low and sell high, either in that order or in reverse order (sell high, then buy it back low).

There are different time-frames in which one can trade from. You can day trade, where you only hold your position for a matter of minutes, perhaps hours, but rarely overnight. You can position trade, where you may hold positions for one or more days. Or you can be a longer-term trader, holding your positions for weeks or months.

The time frame one chooses to trade has a strong correlation to the degree of risk the trader is willing to be exposed to. For example, a day trader who only wants to capture quick short-term moves within the day will only want to risk a very small amount per trade, since this type of trader is only looking to capture small profit moves. The position trader who holds a position for a day to a few days may allow a little more risk exposure, since more profit is being expected. The same goes for long-term traders that hold a position for several weeks. With a much larger profit objective, this type of trader usually has a wider protective stop-loss for a higher risk exposure, in order to not get stopped out too early by the market’s normal swing behavior.

While the time-frame one chooses to trade has a direct correlation to profit potential and risk exposure, so does Market Timing methods.

Consider the following example of a position trader:

The position trader is looking to catch a new move usually based on the daily chart. This trader believes that the market will likely move higher real soon and has the potential to rise for several days. The market timing method used by this trader often sees the market already two or three days into the move before getting the signal to enter. Because of this, the trader usually will put the initial protective stop just below the start of the new move. Due to the lagging nature of the timing indicators used, that can be a substantial risk exposure and would require a profit objective that exceeds the risk based on the winning ratio of the method used. In other words, if the timing method has an accuracy of 50% of producing good timing, the profit objective needs to be greater than the risk exposure to come out ahead over time. Yet, the more lag in the market timing approach, the lower the percentage of catching good trades enough profit to more than cover the risk exposure. Even a timing method that had a lot of lead time would expose the trader to higher risk because the market would still be moving against your position for a period of time before it turned as anticipate by the lead indicator (if it turns, that is).

Now consider what would happen if you had a timing method that had very little lead or lag time. The trader, having confidence in the timing method being very tight (the turn occurs soon of the signal), would not have to put on a large stop-loss because the turn is expected to occur right away. This drastically lowers risk exposure. In addition, this would increase the profit potential because the trader can now get into the trade as soon as the turn is occurring rather than waiting for late signal where the move is two or more days already in progress.

It should be clear by these two examples how important Market Timing really is. While it is true that you should have good money and risk management, the ability to act on your signals when you get them, Market Timing makes all these other things much better. Better Market Timing means higher confidence, which goes well toward trader psychology. It lowers risk, making risk and money management better. It allows for the potential to catch more of the move, which goes toward greater profit opportunities.

As a professional Market Analyst for two decades now, I’ve seen all sorts of different Market Timing methods. There are many approaches to Market Timing, and I personally have a lot of respect for a number of tools used for this purpose.

When it comes to indicators, I have found that the oscillator types such as the Stochastic and MACD provide useful insight into the ebb and flow of price action. You may catch a few moves as soon as they start, but you will also be too early or late on many as well. Use them to get a good handle on DIRECTION and DURATION. Moving averages help in getting an overall feel for trend, but they lag and in my opinion are not precise enough for precision market timing. What I have found to be best for Market Timing, and should be used in conjunction with oscillators for DIRECTION, are what I call “turn dates”. You can calculate basic turn dates using Fibonacci ratios, or you can do so using Gann counts. There are several methods that the trader can employ for anticipating the day that a bottom or top will occur. Once you find an approach that has a high degree of accuracy based on your own testing of it, you are well on your way to trading with LESS RISK and HIGHER PROFIT POTENTIAL than if you just rely on leading and lagging indicators, chart patterns, or simple support/resistance calculations.

Writing Tips For Article Marketing

Online article marketing has become a very popular marketing technique. But many newcomers are wondering why their articles are often not producing any results. In most cases it is because they are not observing some of the most fundamental rules for article marketing writing. The following is a concise list of points you need to take into account when writing for article marketing.

First, it is clear that in order to direct a lot of traffic to the landing page of your website, you will need to write a lot of articles. The more you have unique articles related to the product or service you are promoting, the more people will have a chance to stumble upon these articles when they search for the associated keyword in Google. Uniqueness of the article is very important for article marketing, as Google could penalize duplicate articles.

Second, your article should have a structure. It should have a title, an introduction, a few content paragraphs, and a conclusion. A successful text for article marketing should have about 500 words. Articles that are too short will not appear as very serious, where as very long articles will discourage people from reading them until the end where you usually drop your the link to your website.

Third, for article marketing campaigns to be successful, each article you write should be based on a targeted keyword phrase. For example, if someone is looking for information on training poodles, he might use the keyword “how to train poodles” to search in Google. You should make sure your candidate keyword gets enough traffic and that competition from other websites targeting the same keyword is not too high. You should be using the keyword in the title of the article, in the introduction, in the conclusion, and within the body of the article. The keyword usage should represent about 2% of all the words in the article. Also wording your title in the form of a question evoking a solution to a particular problem could be a good way to retain the attention of the reader.

Fourth, your article should be easy and fun to read. If the reader wanted to find a formal, complicated and boring description of what he is looking for, he would have searched Wikipedia or other similar websites. You should keep in mind that if you were searching for something on the web you would probably type in something simple, clear and direct describing what you are searching, and you would hope for a simple, clear, direct, interesting, relevant and concise response. Some humor would not hurt either. A good guideline to get your readers to relate much easier to your article content is writing as though you were talking to a friend or member of your family. Writing in the first person (using term such “I” and “myself”, etc.) would also help achieve that.

Finally, you will need to include into your article the link to your website or the direct link to the merchant of the product or service you are promoting, if the directory you are submitting to allows it.

Make sure that the keyword is used in the link anchor, and try to word the anchor in a way that arouses the curiosity of the reader. It is also good practice to insert the link a second time if the directory allows it, using the “http://www.yourdomain.com” form, so that if the article is copied the link address does not get lost.

Following the above recommendations you will find that they are indeed very beneficial for article marketing as they will surely help your articles contribute to the success of your online marketing campaigns.