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Investing in Futures and Options with your IRA

Investing in Futures and Options with your IRA to Generate earnings that are Income Tax Deferred or even Income Tax Free

By Dennis Blitz, President, The IRA Club

Bob Miller thank you for giving me the opportunity to write about a little understood provision in the IRA regulations that may help any IRA account owner invest in the opportunities  that can provide the kind of returns people will need to achieve their financial  goals.

Over 97% of all IRA accounts are currently held at major Brokerage Firms and Banks that needlessly load up their IRA accounts with restrictions. These restrictions are there to benefit the Brokerage Firm more than they benefit the IRA owner. While many Brokerage Firms give lip service telling clients that their IRA account may be invested any way the account owner chooses, the reality is that the IRA Account owner is restricted to only those investments on that Brokerage Firm’s “allowable list”.

Two common investment opportunities often not found on the Brokerage Firm’s list are Futures and Options: Hence, over 97% of the IRA accounts are locked out of investing in this potentially profitable area.

Of course having a Futures and Options account is not for everyone however, if you want your IRA to invest in these and other alternative asset types shouldn’t you be allowed to?  Well its surprisingly simple; here’s how:

  1. First, you need to know that the Congressional Act that created the IRA, the IRS and the Department of Labor (DOL) have no restriction on your IRA investing in Futures and Options. The restriction is placed on your IRA by your IRA provider.
  2. Simply ask your Futures or Options brokerage to suggest an IRA company who will accept Futures Accounts or Manages Futures accounts.
  3. Call the new IRA company, they can answer any questions. Generally your IRA account can be opened over the phone.
  4. The new IRA company will transfer the funds you want from the former IRA Company.
  5. The new IRA company will sign your new Trading account application. (This is because your IRA is the owner of the trading account.)

That is it. Such an IRA account will cost you a few hundred dollars a year and will allow your IRA to invest as you (not a major Brokerage Firm) want to invest.

The IRA account can be a Traditional IRA, a Roth IRA, SEP IRA etc. There is no limit to the number of IRA accounts you own.

We hope this information was helpful,

Dennis Blitz
The IRA Club
888-795-7950

Foremost Trading is not a tax advisor and cannot offer tax advice.

Post by Colson Hauser

Alternative Investment Specialist with Foremost Capital Management

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Contact your Foremost Alternative Investment Specialist for additional information
The Foremost Team (630) 485-2100 or (888) 818-0880

Disclaimer: Trading futures, options on futures, retail off-exchange foreign currency transactions (“Forex”), investing in managed futures and other alternative investments are complex and carry a risk of substantial losses. As such, they are not suitable for all investors. This website contains information obtained from sources believed to be reliable, but such information has not been independently verified and its accuracy is not guaranteed by Foremost Trading. Past performance is not necessarily indicative of future results. Any mention of performance in any context whether actual or hypothetical is no guarantee of future results. Foremost Trading became a registered ‘dba’ of RCM Alternatives in July of 2020. Please see full disclaimer here: https://www.rcmalternatives.com/disclaimer/

Calling All IRA Accounts

IRA Accounts

Over the years we’ve had clients trade forex and futures in IRA accounts at various IRA custodians.  Some of these firms have been bought out or merged, while others are still the same old dinosaur that has been around forever.

There are many different IRA custodians out there, but NOT many who deal with a variety of alternative investing for the self-directed IRA, such as:

  • Trading futures, forex, and options
  • Purchasing real estate
  • Private equity
  • Bond offerings (non-public)
  • Checkbook IRA (this is where your IRA owns shares in an LLC which does all of its own investing autonomously)

While there aren’t a ton of these types of custodians, there are some out there and we are determined to identify those that do it best.  If you would like to be a part of our “quest for the best,” please email your broker at Foremost.  We would love to hear some feedback from you about what you do and don’t like about your current custodian.  With your help, we might be able to determine if a transfer would benefit many of our clients where they can receive better service at better rates.

Or contact our admin!

We will compile what we hear and know and share the results with you in a future post.

The Foremost Trading Team

Have questions? Call or email us!

(888)818-0880
info@foremosttrading.com

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Disclaimer: Trading futures, options on futures, retail off-exchange foreign currency transactions (“Forex”), investing in managed futures and other alternative investments are complex and carry a risk of substantial losses. As such, they are not suitable for all investors. This website contains information obtained from sources believed to be reliable, but such information has not been independently verified and its accuracy is not guaranteed by Foremost Trading. Past performance is not necessarily indicative of future results. Any mention of performance in any context whether actual or hypothetical is no guarantee of future results. Foremost Trading became a registered ‘dba’ of RCM Alternatives in July of 2020. Please see full disclaimer here: https://www.rcmalternatives.com/disclaimer/

Time Sensitive Information: Losses in Roth IRAs and Taxes

The following tax notice was shared with us: Ponzi Losses and IRAs.

It is a response letter from Chief John P. Moriarty at the Department of the Treasury to the Honorable Orrin G. Hatch on the topic of tax treatment between the losses direct and indirect investors sustained from the fraud Mr. Bernard L. Madoff perpetrated.

The letter may be significant as it does discuss lost funds in personal savings, a charitable remainder trust, and Individual Retirement Accounts (IRAs).

While Foremost Trading is not a tax advisor and cannot offer tax advice, you should consult your tax advisor about this topic and may want to share this letter.

The Foremost Trading Team

Have questions? Call or email us!

(888)818-0880
info@foremosttrading.com

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Disclaimer: Trading futures, options on futures, retail off-exchange foreign currency transactions (“Forex”), investing in managed futures and other alternative investments are complex and carry a risk of substantial losses. As such, they are not suitable for all investors. This website contains information obtained from sources believed to be reliable, but such information has not been independently verified and its accuracy is not guaranteed by Foremost Trading. Past performance is not necessarily indicative of future results. Any mention of performance in any context whether actual or hypothetical is no guarantee of future results. Foremost Trading became a registered ‘dba’ of RCM Alternatives in July of 2020. Please see full disclaimer here: https://www.rcmalternatives.com/disclaimer/

IRA and Investments

IRA & Investments

Many people are not aware they have a choice when it comes to how their IRA is invested. Have you ever considered managed futures for your IRA or Rollover 401k? Additionally, have you heard that the IRS increased the 2013 IRA contribution limit to $5,500 ($6,500 if you are over 55)?! This applies to both Traditional and ROTH IRAs.

The 2012 contribution limit is $5,500, which can still be made until April 15, 2013. We’re already through the second month in 2013, time flies! I’d like to propose a simple idea you can do right now to invest with IRA money.

If you’ve been with Foremost for any length of time, you know that White River Group is one of our top picks among registered Commodity Trading Advisors. Their Stock Index Program requires a minimum investment of only $10,000. In 2012, they managed a net gain over 24%! See their complete month-by-month performance record for yourself HERE. This advisor/account manager trades options on futures contracts. (See additional risk information at the bottom of this email regarding option trading.)

Assuming you haven’t made your 2012 contribution, you can deposit $5,000 to your IRA before April 15th and $5,500 for your 2013 contribution. Now with $10,500, you’re ready to invest with White River Group in a tax-advantaged growth environment! Please note that Foremost Trading LLC is not a tax advisor and we cannot and do not provide tax advice. You should discuss this as well as all of your investment with your tax advisor. Then you may want to consider diversifying a portion of your IRA funds to take advantage of these managed account returns. Also, please note that IRA custodians have fees. If those fees are allocated to this investment they will negatively affect the bottom line of performance results.

As a reminder, futures trading involves substantial risk and may not be suitable for all investors. Past performance is not indicative of future results, which may be better or worse.

Using IRA funds is a vehicle that many people forget about or were not aware of in the first place. Obviously, you may also participate in White River Group’s managed account services with regular funds and other types of money (trusts, LLC, etc.).

Note: Futures, Forex and Option trading involves substantial risk, and may not be suitable for everyone. Trading should only be done with true risk capital. Past performance either actual or hypothetical is not indicative of future performance.

Additional Risk Information for Option Trading: Trading in Options on Commodity Futures – The Advisor may trade your account in options on commodity futures contracts. Options on futures are speculative and highly leveraged. The purchaser of an option risks losing the entire purchase price of the option. The seller (writer) of an option risks losing the difference between the premium received for the option and the price of the futures contract underlying the options which the writer must purchase or deliver upon exercise of the option, which could subject the writer to an unlimited risk in the event of an increase in the price of the contract to be purchased or delivered.

The Foremost Trading Team

Have questions? Call or email us!

(888)818-0880
info@foremosttrading.com

Follow us on Facebook!

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Disclaimer: Trading futures, options on futures, retail off-exchange foreign currency transactions (“Forex”), investing in managed futures and other alternative investments are complex and carry a risk of substantial losses. As such, they are not suitable for all investors. This website contains information obtained from sources believed to be reliable, but such information has not been independently verified and its accuracy is not guaranteed by Foremost Trading. Past performance is not necessarily indicative of future results. Any mention of performance in any context whether actual or hypothetical is no guarantee of future results. Foremost Trading became a registered ‘dba’ of RCM Alternatives in July of 2020. Please see full disclaimer here: https://www.rcmalternatives.com/disclaimer/