Are you looking for information about gold in an IRA? Interest in gold grows and shrinks based on a complex web of economic and financial issues. There are several ways to protect the value of your savings or retirement, and many investors use the precious metal to hedge against inflation.
It is important to educate yourself. “If you are interested in buying gold, do some digging before investing. Some gold promoters don’t deliver what they promise, and may push people into an investment that isn’t right for them,” states the Federal Trade Commission (FTC), the nation’s consumer protection agency.
Unlike other investments, gold and other precious metals represent real value. Much like real estate, gold is a real asset that is physical and tangible. As a result, gold and other real assets have a much lower investment risk compared to financial products, like stocks and bonds.
Despite the low risk, gold can provide significant gains. CNBC recently reported gold could reach $1,400. “Once we get a break above the $1,280 area, I suspect there will be a fast directional move higher,” stated Zev Spiro, CEO and chief market technician at Orips Research, in the interview.
However, not all gold investments are equal. Some are more liquid than others. Some forms have a greater risk than others. There are also different costs associated with each. Today, we are sharing some of the best ways to invest in gold.
Physical Gold
There are few commodities you can buy that one can easily store indefinitely. Imagine trying to store other traded commodities such as coffee, sugar, beef cattle, heating oil, or natural gas. The fact that gold trades by the ounce means you can keep it in your home or hide it away in a safe deposit box. Of course, to comply with IRS regulations, gold in IRAs must be held by a custodian or trustee.
The downside to physical gold is you will buy it at retail but sell it at wholesale prices. This means you will need to hold coins and bullion for a while before making your money back. You should not use physical gold as a speculative investment.
Nonetheless, gold is the only real money. Yes, gold’s value does rise and fall based on the law of supply and demand. But gold will never go to zero because it has an inherent value. Much like real estate, gold is for the purpose of preserving value compared to a shrinking dollar.
Exchanged-Traded Funds
An ETF is an investment fund that trades close to its net asset value. There are a growing number of investors attracted to exchange-traded funds because of low costs, liquidity, and stock-like features. They also remove some of the major worries investors have about physical gold.
Buying coins and bullion is scary for some investors. There are concerns about purity, storage, safety, and insurance costs. All those worries disappear with an ETF. It makes investing in gold as easy as buying stock.
Mutual Funds
Overall, mutual funds are the safest ways to invest in the stock market. It is one way for new or novice investors to have a diversified portfolio. This means you can find funds with different levels of investment in gold, other commodities, and/or stocks. Because of this, different mutual funds have different levels of volatility and risk.
Mining Stocks
Rather than investing in gold itself, you can also invest in the mining companies. Unlike gold, mining stocks do have a production value, and can see greater gains in a shorter time. Like other stocks, there is volatility and you can lose some or all of your investment. Nonetheless, the price of and demand for gold will influence a company’s profitability and stock price.
If you would like to talk more about ways to have gold in your IRA, or would like more information, please contact us.
