Poor IRA Performance? 4 Investing Strategies

There are a number of different investing strategies that people use in their IRA. If your IRA performance is not what it should be, you might want to consider looking at some other alternatives. Here are a few investing strategies to consider if you are looking for better returns in your IRA.

1. Balanced Fund

One type of investment that you might want to consider for your IRA, is the balanced mutual fund. A balanced mutual fund is one that diversifies their holdings over a number of different types of investments. For example, they might invest part of their money in stocks, part of it in bonds and the rest in the money market. This gives you a very diversified method of investment. These types of funds strive to provide consistent growth as well as a regular source of income. Therefore, with this type of fund, you get the best of both worlds. If you have a long time to invest, this type of fund can be very beneficial.

2. Dividend Stocks

You also might want to consider investing in dividend stocks. Many stocks regularly pay a dividend to their shareholders. Most of them pay quarterly, however, some stocks are designed to pay a dividend every month. In conjunction with investing in dividend stocks, you should also consider reinvesting your dividends. The amount of money that you receive in the form of a dividend is based on how many shares you own of the stock. If you are constantly buying more shares with your dividends, your payments are going to get bigger and bigger. This strategy has the potential to substantially grow your portfolio whether or not there is any capital growth in the stocks themselves.

3. Dollar Cost Averaging

One of the most time-honored strategies of investment is dollar cost averaging. With this strategy, you will automatically purchase a certain amount of a security on a regular interval. This allows you to average out the price movements in a security and get as many shares as possible. When the price of an investment is low, you will buy more shares. When it is high, you will buy fewer shares at a higher value. Over the long-term, this has been proven to work effectively at building wealth. Many people combine this strategy with a no-load mutual fund as it allows you to invest your money frequently without paying any transaction costs.

4. Commodity Investing

Something else that you might want to consider is getting involved in the commodity market. There are many commodities that you could invest in they could potentially provide you with very nice growth in your portfolio. This type of investment also allows you to diversify away from the stock market and traditional forms of investment. Therefore, even during a down market, you can still make some nice returns on your investment. If you do not want to go through the trouble of buying futures contracts, you can also get involved in the commodity market through mutual funds or ETF's.

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