Two of the most common concerns when evaluating alternatives are illiquidity (the investments are not publicly traded) and long duration (typical hold period is 7-10 years). These are both valid concerns when making an investment decision and evaluating personal cash-flow needs or accessing capital in the event of an unforeseen life event.
That said, there is a simple and often overlooked solution to realize the benefits of alternatives while preserving the flexibility of having cash on hand: investing from your retirement accounts.
Many people consider their retirement accounts an untouchable pool of capital they won’t rely on for many years (you must be 59.5 to withdraw from an IRA without penalty), allowing them to take a long-term perspective that aligns with the long-term value of alternative investments. These two strategies provide numerous benefits, including the potential for compound returns, the ability to ride out market volatility, tax benefits, and future income security.
The best way to invest in alternatives via retirement accounts is a self-directed IRA, which offers the same tax advantages as conventional IRAs but allows you to invest in a variety of alternative assets, including venture capital, private equity, private credit, and real assets.
Our goal at Gridline is to make this process seamless, and we have established partnerships with Equity Trust and Millennium Trust that allow you to invest in all of our Thematic Portfolios.
We’re excited to announce that next month we will roll out a new platform feature that allows you to open, fund (roll over an existing IRA or 401k account), and invest from a retirement account all without leaving the Gridline platform.
No more paperwork, wet signatures, or mailing physical checks.
We’re excited to provide our members the ability to capitalize on the benefits of alternatives with their long-term retirement accounts, and if you would like to chat with our team and get the process started, please do not hesitate to reach out.
-Logan Henderson, Founder and CEO
Worth a Read
The Incredible Resiliency of Private Markets
A closer examination of the industry reveals an optimistic reality, with significant growth in retail investment, exceptional PE performance, and rapid expansion of sectors like private debt. Read more.
Money "Unprinting" Reaches a 35-Year-High
The loss of "easy money" increases risk aversion, leading investors to look for value beyond the short-term turbulence. Read more.
A Final Thought
Bill Gates is one of the largest private land owners in the US, with about 270,000 acres of farmland spread across 18 states. When asked why he owns so much farmland, he's stated "There isn't some grand scheme involved - in fact all these decisions are made by a professional investment team."
Why would one of the world's most preeminent tech founders have such a substantial allocation to farmland? Likely because farmland as an investment offers:
- Reliable inflation hedging characteristics
- Steady cash income generation
- Strong risk-adjusted total returns
- Low correlation to U.S. equities and other asset classes
- Compelling fundamentals supported by land scarcity and growing global demand for food and timber products
Just a seed we wanted to plant with you. We've got a big announcement coming soon.
-The Team at Gridline