How Can I Stop My IRA From Losing Money?

An Individual Retirement Account, or IRA, is a tax-advantaged account designed to help save for retirement. You can open one with various financial institutions – brokers, banks and even robo-advisors can provide them.

Keep in mind that IRAs are designed for long-term investing, so your investments may experience ups and downs over time. This is normal, and there are ways you can help your IRA recover from losses.

1. Diversify Your Investments

Diversifying is key for any portfolio as it reduces the risk of losing money if one or more investments suffer a sharp drop. Furthermore, diversification increases your odds that at least some investments will experience an upswing.

Diversifying your portfolio by investing across industries, market sectors and types of securities is one way to bolster it. There are various methods available to you for doing this – mutual funds and exchange-traded funds (ETFs) are two tools you could use; both provide exposure to an array of stocks, bonds and other assets through one purchase.

Diversified international funds or asset class-specific funds like real estate and precious metals could provide more diversification. Rebalancing is key for maintaining a balanced portfolio; selling overperforming assets to purchase underperforming ones keeps your IRA aligned with its target asset allocation.

2. Use Stop-Loss Orders

When markets become volatile, your IRA’s assets will fluctuate in value due to holding various securities such as individual stocks, mutual funds and exchange-traded funds in your account.

Make sure your investments are diversified; otherwise, a sudden market crash could severely devalue your IRA.

Stop-loss orders can also help protect against excessive losses in an IRA, by selling investments when their prices fall below a predetermined level. Simply contact your broker to set one.

Be wary of making speculative investments in your IRA. Although they might tempt us with “get-rich-quick” mentalities, these investments tend to lead to losses in retirement accounts. Instead, look into fixed rate annuities which offer greater stability without subjecting your retirement accounts to market volatility – these could help your IRA stop losing money altogether! For tailored recommendations that might work better with your specific circumstances contact a financial advisor now.

3. Don’t Check Your Balance Too Often

As mobile banking becomes more and more convenient, it may be tempting to login daily and check your balance. While this might seem harmless enough, if left unmonitored it can lead to insufficient funds in your account for transactions and overdraft fees.

As your investments (stocks, bonds, mutual funds or exchange-traded funds) rise and fall in value, so will your IRA account balance. Eventually though, your goal should be to reach retirement with enough money for living the lifestyle that best suits you.

Staying the course during tough markets is key, according to research conducted by Fidelity Investments, as research showed those who held out until after 2008’s stock market crash had account balances 50% higher 10 years later compared with those who sold during crisis. By diversifying your portfolio and using stop-loss orders as well as regularly rebalancing it can help protect IRAs from experiencing money losses during market crashes.

4. Rebalance Your Portfolio

By investing across various asset classes, diversification reduces the chances of any one area experiencing loss of value and diminishing risks associated with investing.

However, your mix of stock and bond funds should reflect both your risk tolerance and investing goals. Furthermore, it’s wise to rebalance your portfolio periodically.

Rebalancing involves selling high-performing investments and purchasing lower performing ones to bring your asset allocation back in line with your desired plan. Rebalancing can be completed at regular intervals such as monthly or quarterly; however, you should keep in mind that doing this may have tax repercussions, especially as you approach retirement age.

Speculative investments may seem attractive when the market is struggling, but they’re more like lottery tickets in that most people lose money than win it back. With careful planning and an eye on long-term returns, however, you can protect your IRA against excessive losses without risk. The key lies in having an appropriate investment time frame with enough flexibility for riding out any storms that come your way.

Raymond Banks Administrator
Raymond Banks is a published author in the commodity world. He has written extensively about gold and silver investments, and his work has been featured in some of the most respected financial journals in the industry. Raymond\\\'s expertise in the commodities market is highly sought-after, and he regularly delivers presentations on behalf of various investment firms. He is also a regular guest on financial news programmes, where he offers his expert insights into the latest commodity trends.

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