IRA Funding Investments Study

Filed in archive Uncategorized on January 20, 2012

© 401K

A recent study of IRA funding investments found that IRA decisions are very similar to those seen in employer and provided 401k plans. In both cases, people seem to understand the need to diversify their holdings and reduce the riskiness of their investments as they get older. This is a good strategy that allows lowering of risks and the ability to test out other forms of investments which would otherwise have been used at all. Both of these behaviors are highly recommended by investment professionals.

IRAs account for 25% of total US retirement assets and they are also the investment assets most directly controlled by individual investors with little formal financial expertise or investment experience. With the financial crisis rumor happening once again, individuals are advised to diversify where you money is placed to ensure that you are not in greater risk or losing money.

This has raised concern that investors may not make wise choices with IRAs and 401ks for this reason. Yet while there are no formal requirements or discipline governing IRA accounts, there is strong evidence that individuals have been adjusting their holdings over time and diversifying their investments by increasing the percentage of bonds as they age.