That’s probably not an investment you ever gave serious consideration to in your IRA. But one of the best long-term strategies for an IRA, or any other type of retirement account, is to diversify as broadly as possible.
Sure, you want to invest in traditional investments, like fixed income and equity investments. But you should also have at least a small amount of money invested in alternative investments. These can include real estate, precious metals and currencies. Each serves a purpose within your portfolio, and can represent an important countercyclical investment. That is, they may perform well when more traditional investments are in a long-term declining pattern.
Since most of the major currencies trade in lockstep with one another, the best play in the currency markets is usually with the more thinly traded currencies. That can include currencies such as the Iraqi dinar.
This is why it can be instructive to learn how to use your IRA to invest in Iraqi dinar, or in other exotic currencies. The point isn’t to load up your IRA portfolio with exotic currencies, but rather to take a small position, that has the potential to produce great gains.
What Types of IRAs Allow for Investing in Foreign Currency?
You start by selecting a self-directed IRA custodian. If you want to hold traditional investments in your IRA, you’re best to do that through one of the popular investment brokerages. If you want to diversify into alternative investments, such as precious metals and currencies, then you will have to choose a custodian that actually provides such accounts.
Treasury Vault can act as custodian for both precious metals and currencies. This can be done through either a Gold IRA or a Currency IRA. You can learn how to use your IRA to invest in Iraqi dinar, or other types of exotic currencies, as long as you have at least a general understanding as to how these currencies might work in your overall portfolio strategy.
The one provision that’s important to understand in a specialized IRAs, is that you are not permitted to take personal custody of physical asset. The asset is purchased by you through the custodian, and then held in the account under your name.
This is actually not unlike self-directed IRA accounts that hold traditional investments. Even with those accounts, you don’t actually take possession of the stocks, bonds or funds that are held in the account.
How Self-Directed IRAs Work
With a self-directed IRA, you can choose your own investments, create your portfolio, and manage the account. There is no investment manager handling these functions for you. It’s the perfect type of IRA for the person who wants to do his or her own investing.
It’s generally better suited for more experienced investors, who have less need for oversight and advice. Even so, you will need to learn how to use your IRA to invest in Iraqi dinar before taking a position in the currency.
According to the IRS, self-directed IRA rules allow you to invest in just about anything, including foreign currencies. The list of prohibited investments is relatively short, and includes the following:
- Metals – with exceptions for certain kinds of bullion,
- Coins – (but there are exceptions for certain coins),
- Alcoholic beverages, and
- Certain other tangible personal property
Just about every other type of investment is permitted, including stocks, bonds, mutual funds, exchange traded funds (ETFs), options, futures and FOREX, currencies and real estate investment trusts (REITs).
Once you complete the paperwork for your self-directed IRA – which the investment trustee will largely handle for you – you can fund your account, and begin investing.
Diversifying Your IRA Investments
Discussions of alternative investments for your IRA are really about achieving a higher level of diversification.
While it’s true that most IRAs, including self-directed IRAs, hold primarily traditional investments, like stocks, bonds, mutual funds and ETF’s, greater diversification is achieved when you include one or more alternative investments.
Those alternative investments can include precious metals, currencies, and even real estate.
The reason why these investments increase your diversification is because they tend to respond positively to different market conditions than traditional investments do. For example, both precious metals and foreign currencies are likely to rise in value if the dollar falls in value, dragging down price levels for stocks and bonds.
If you’re going to include an exotic currency in your IRA, like Iraqi dinar, be sure you understand how to use your IRA to invest in Iraqi dinar. It’s an investment that has substantial upside potential, but also a high level of risk.
Where to Open a Self-Directed IRA
For this reason, you should hold the majority of your IRA assets in a large brokerage firm, where you will hold stocks, bonds, funds and other traditional investments. But you can also have a second, smaller IRA, for alternative investments. The second account is where you would hold precious metals and currencies.
You might decide for example to hold 90% or 95% of your IRA in a large investment brokerage account. The remaining 5% to 10% could be in the alternative asset IRA.
How to Buy Iraqi Dinar
If you do decide to open a Currency IRA, you may want to favor some of the larger and more well traded currencies. These can include the euro, the Japanese yen, the British pound, and the Canadian dollar.
But you may want to diversify still further, by also investing in less established currencies. This should include “exotic” currencies, such as Iraqi dinar. Just be sure that you know how to use your IRA to invest in Iraqi dinar before taking a plunge into the currency.
Where to buy iraqi dinar is an important question, since it is an exotic currency, and not available for buying and selling on many platforms. Some banks may allow it, but they won’t set up a self-directed IRA for you to hold the currency. The better course is a currency trader, such as Treasury Vault.
Once you decide on investing in the currency, the next question is what is the iraqi dinar rate? It’s impossible to know what the future direction of the currency exchange is. But the information as to the trading range of the currency for the past 12 months is readily available. You should make an attempt to buy the currency at the lower end of its range, to get the best rate.
Iraqi Dinar versus the U.S. Dollar – Today’s Rate
If you understand how to use your IRA to invest in Iraqi dinar, begin tracking the US dollar exchange rate on a regular basis. You can do this using an exchange rate calculator.
As of October 5, 2017, the Iraqi dinar is trading at 1,169.85 Iraqi Dinar (IQD) = 1 USD. Over the past 12 months, the dinar has traded at a high of 1149.7689 IQD = 1 USD, and a low of 1194.41412 IQD = 1 USD. That means that it is now trading at roughly the middle of its 12-month trading range, which would mean that purchasing it now would carry average risk for an exotic currency.
One of the hoped-for events with Iraqi dinar’s is revaluation. It has been discussed and debated over the past several years, with no conclusive outcome. But should revaluation take place, the currency could move above its current level of exchange valuation. That would mean that buying in now represents an opportunity to maximize future gains on the currency.
Iraqi Dinar versus Other Foreign Currencies
The exchange rate of the Iraqi dinar vs. the US dollar isn’t the only significant correlation. Naturally, the dinar does trade among other currencies, including the euro, Japanese yen, British pound, Canadian dollar, and other currencies.
The dinar can strengthen or weaken against these currencies, irrespective of its exchange rate with the US dollar. However, since the US dollar is the international reserve currency, the exchange rate of the dinar to the dollar is certainly the most important one.
This is even more true if you are a US resident. After all, you will be purchasing dinar using US currency – the dollar. Therefore the relationship between the two currencies is all-important. It’s still important to track the exchange rate of the dinar with other world currencies nonetheless. You can do this using the same exchange rate calculator that you use for the dinar in the US dollar.
How to Use Your IRA to Invest in Iraqi Dinar
Once again, in order to hold a currency like Iraqi dinar in your IRA, you do need to learn all that you can about how to use your IRA to invest in Iraqi dinar. More importantly, you must choose the right custodian in order to hold the currency at all.
The crucial question is where to buy iraqi dinar in the US? Since major brokerage firms and banks don’t trade the currency, or other types of exotic currencies, you will need to work with a dedicated currency trader, such as Treasury Vault.
We can handle the process of buying the currency, storing it, and when the day comes, selling it. That will take the burden off you. Your only decisions will be how much to fund your account, and at what point to make both the buy and the sell decisions.
Just be sure that you are thoroughly versed in how to use your IRA to invest in Iraqi dinar before doing anything. It is an exotic currency, and therefore has above average risk. You will want to hold only a small amount of your IRA portfolio in the currency, while having the great majority of your funds invested in more traditional investments, like income and equity investments.
If you’re interested in opening a Currency IRA, please call us at our toll-free phone number – (888)348-2441 – or email us at email@example.com. We’ll make the process easy!