Can Alternative Assets Stand the Test of Time?

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Last year, representatives from New Direction Trust Company had the pleasure of attending the Long Beach Expo in Long Beach, CA. Coin collectors and dealers from around the country converged on the Long Beach Convention Center to see the latest and greatest in the numismatic world. While some dealers offered IRA-eligible precious metals, most exhibited older coins or currency notes for the history buffs in the room.

Although self-directed IRAs cannot hold such collectibles, the most intriguing antiquity at the show may have caught the attention of precious metals investors. “The Ship of Gold” display chronicled the 1857 sinking of the S.S. Central America along with its treasure trove of gold and silver. According to Numismatic News, 3,100 gold coins, over 10,000 silver coins, and 45 gold ingots were recovered in 2014. The sunken treasure was valued at approximately $40 million, representing a fraction of the estimated three-ton haul the S.S. Central America carried.

These items bear significant collectible rather than market value, but they also provide a fascinating insight into the power of tangible assets. We won’t live the century and a half it took for the S.S. Central America's bounty to reach Long Beach, but the sunken treasure provides a glimpse into how precious metals were revered once upon a time. We value precious metals similarly today and may therefore consider the potential strength that gold, silver, platinum, and palladium could maintain down the road.

For those who prefer real estate, the Louisiana Purchase offers a similar historical lesson. According to the Office of the Historian website, the United States government purchased the Louisiana Territory (530 million acres) from France for $15 million. The inflation-adjusted price of the transaction comes to approximately $317 million, which puts today’s per-acre price at about $0.60 (that’s sixty cents, not a typo).

Just as early Americans recognized the value of gold, President Jefferson recognized the value of land and didn’t hesitate when a quality opportunity presented itself. While past performance is no guarantee of future results, it’s fascinating to think about how the investment strategies we implement today were so prevalent in the past. Physical assets like precious metals and real estate have held some measure of value throughout the known histories of investing and commerce. As such, incorporating alternative IRA investments like these—which have spanned decades in their relevance—into your self-directed retirement plan can help protect your portfolio against the volatility of the intangible securities exchanged on Wall Street.

New Direction Trust Company does not recommend or endorse any particular investment strategy, but we’d be happy to discuss real estate, precious metals, and any other alternative investment options that have piqued your interest. Please don’t hesitate to send us an e-mail at info@ndtco.com or give us a call at 877-742-1270 if you have questions or concerns.

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