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IRA Financial Blog

Trade War Impacting IRA/401(k) Performance – Episode 199

trade war impact

IRA Financial’s Adam Bergman discusses the trade war impact on your IRA and 401(k) performance and what types of alternative investments you can invest in.


The trade war impact is affecting most traditional investments, such as stocks, mutual funds and ETFs. In his latest podcast, Mr. Bergman discusses the equity markets and how they’re effected as well as alternative investments you can make with your retirement funds. Alternatives are not as affected as the traditional investments. We must preface this by saying we’re not telling you what you should invest in. We’re simple educating you on what you can invest in.

The Trade War Impact

The long-standing trade war between the US and China is impacting both countries. President Trump is imposing tariffs on China, which affects both economies. We’re not here to talk about the politics of the trade war impact on America. However, we do want to discuss the affect it is having on your investments. It’s a very volatile time for the markets. If all your IRA and/or 401(k) funds are invested in traditional equities, you’re leaving yourself open to these major swings.

What you can do, if your retirement plan provider allows it, is look at other investments options. You may not know that you don’t have to invest in stocks and bonds with your retirement funds. So long as it’s not prohibited by the IRS, you can probably invest in it.

Alternative Investments You can Make with Your IRA or 401(k)

There is a world of opportunity out there for investing. Alternative asset investments are becoming more and more popular within retirement plans. Generally, you will need the proper custodian to make such investments. If you have a retirement account at your local bank, you are probably stuck with traditional products. Banks make money by charging commissions on trades and by using the money saved in your plan. However, they don’t make money if you are not utilizing their products. Further, if your retirement funds are used in alternatives, it’s usually not there for long periods of time.

What Can’t You Invest In?

According to IRS rules, there are basically three things you can’t invest in:

  1. Life Insurance (note that certain products are allowed in a 401(k))
  2. Most Collectibles (such as art, rugs and certain coins)
  3. Any investment involving a disqualified person

Just about anything else can be invested in with retirement funds. They must be legal on a federal level. For example, marijuana is legal in many states, however it is not legal on a federal level. Therefore, you can’t invest in any type of cannabis company.

What Can You Invest In?

The list of allowable investments is virtually endless. Here, we’ll talk about the top three investments our clients are making. The trade war impact is much less on these assets. In fact, many thrive when there is economic turmoil.

Real Estate The most popular alternative asset is real estate. You can invest in fix and flips or rental properties. You can go residential or commercial. If you want, you can even invest in foreign properties.

Precious Metals Gold and silver are still the most popular precious metals to invest in. During times of uncertainly, many people flock to gold. Prices generally rise during these times. It’s a solid investment to hedge against rising costs.

Hard Money Loans When the economy is in flux, it may be harder for someone to borrow from a bank. You can use your IRA funds to lend to a friend or family member. Keep in mind, that you cannot lend to a disqualified person. Your friend gets the funds he or she needs, and you get a nice return from the interest you charge.

Read More: Alternative Assets in an IRA

One Last Thing

As we touched upon, you probably cannot invest in alternative assets with your local bank or online company. Therefore you need a special custodian, such as IRA Financial, to make these investments. Anyone can utilize a Self-Directed IRA for these investments. On the other hand, if you are self-employed, you can fund a Solo 401(k). This allows you to serve as the trustee, giving you the freedom to invest in anything you want.


The trade war impact is real on retirement investments. It’s good practice to have money in traditional assets. However, alternatives help diversify your retirement account. You don’t want all your eggs in one type of asset class. Spread your wealth across several sectors to ensure you don’t lose everything if the market crashes.

As always, thanks for listening and be sure to check out all of our podcasts on our SoundCloud page. If you have any questions, feel free to contact us @ 800.472.0646 today!


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