Key Takeaways Almost any type of investment is allowed within an IRA, including stocks, bonds, mutual funds, annuities, unitary investment trusts (ITU), exchange-traded funds (ETFs), and even real estate. Investors can open a Roth IRA with an online broker and choose what types of investments they want to include in it. There's no limit to how many Roth IRAs you can have. However, increasing the number of Roth IRAs does not increase the total amount that can be contributed each year.
Whether you have one IRA or several IRAs, the total contribution limit for all of an investor's IRAs is the same. An IRA is like a bucket filled with assets. In the bucket, you can place whatever you want. It could be cash, stocks, bonds, mutual funds, or even more exotic investments, such as gold or peer-to-peer notes.
By placing these investments in the IRA, they get the tax benefits of the type of account you select (traditional or Roth). Your IRA rate of return will then be based on the investments you choose or, more specifically, on how much you invest in stocks compared to bonds and on the performance of those markets. An IRA is meant to finance your retirement, not to speculate on investments. You need that money to be there later and you can't afford to lose it.
Therefore, the best IRA strategy for most investors is to use a traditional investment strategy: long-term buy-and-hold investments with low-cost index funds. The biggest limitation of using an IRA to buy stocks is that the money invested in an IRA cannot be withdrawn until retirement age (for a standard IRA) or until five years have passed (for a Roth IRA).