Gold IRA Investing
Five Must Have Secrets For Gold IRA Investing
Individual Retirement Accounts (IRAs) are a major part of any retirement plan. These are tax advantageous vehicles for efficient growth of investment portfolios. Conventional forms of the IRA are based on paper-denominated stocks and bonds. However, as the global economic crisis of 2008 proved, paper assets are extremely vulnerable to economic shocks. Contrary to this, the gold IRA is a solid alternative to conventional IRAs. This article will reveal secrets of gold IRA investing for the savvy investor.
The Gold IRA
The gold IRA has the same function as a conventional IRA. However, rather than holding currency-based assets, it consists of gold bullion or coins. A gold IRA may also hold other precious metals, such as silver, palladium, and platinum, which are held by approved custodians in state of the art, secure, and fully-insured locations.
This is perhaps the cornerstone of gold IRA investing. Inflation is the gradual loss of value that a paper currency undergoes with time. It's due to an increase in money supply. Precious metals have limited supply, high cost of extraction, intrinsic value, and high demand. This guarantees their value. In fact, governments use gold bullion to back the value of their currencies, so investing in a gold IRA will therefore insure your retirement nest egg against inflation.
The follies of diversification were exposed during the 2008 credit crisis. Most investors thought they had sufficiently diversified their investments, only to realize that all paper-based assets were correlated. This resulted in enormous wealth being wiped off 401(K)s, putting into jeopardy most retirement strategies. People who had invested in gold IRAs enjoyed significant gains in their asset value, so the only way of truly diversifying your portfolio is by investing in a gold IRA.
Gold has acted as a safe haven for investors and governments since time immemorial. The price of gold will usually spike as panicked investors rush out of paper-denominated assets into gold-backed securities. Your gold IRA investment will only increase in value during economic crises, making it a solid investment regardless of your retirement directions.
Immunity Against Fiscal Policies
Governments resort to printing money to get out of economic problems. This has happened throughout history, and especially after the 2008 economic crisis. Printing money fuels inflation sooner or later, threatening the value of paper-based assets. The current uncertainty over the Federal Reserve’s policies should worry all investors. Gold on the other hand, cannot be manufactured by anyone, making it the best weapon against a government’s policy miscalculations.
Conventional IRAs restrict allocations to certain assets, especially selected mutual funds. This means your funds are managed by a third party, with little input from you. A gold IRA, on the contrary, is self-directed. This means you have a bigger say in how your funds are invested. You get to decide on the mix of your portfolio, and tailor it to fit your specific goals.
Finally, gold IRAs offer the same tax benefits as conventional IRAs. Furthermore, you can easily rollover your traditional IRA or 401(K) plan into a gold IRA. This is an investment vehicle with real asset value, which is immune to manipulation, oversupply, or economic meltdowns.