Is it any surprise that savvy retirement planners are asking “Is gold a good investment choice?” Why shouldn’t they, after everything that’s happened to their hard earned money in the last couple of decades? Look at the dot com bubble burst, the collapse of the housing market, the fraud on wall street, and the auto industry bail outs for examples.
Sure, if you had invested in certain markets that crashed and still had twenty or thirty years until retirement you may have a chance to break even. But ask anyone who was planning on retiring between 1999 and 2012 what happened to their plans, and you’ll see why more and more people are wondering, “Is gold a good investment? ”
But why is investing in gold a smart thing to do? What is it about the precious metals that has savvy investors using it as a safe haven investment? Why are they turning to it as a refuge from inflation and major losses of assets?
This site was created to educate and inform investors looking to the gold market for investments that will produce solid gains and low risk. Of course, no one can predict what will happen in any market. But by reading the information on this site, you’ll learn the following:
- Why gold is one of the best investment options?
- Ways investing in gold that are tax sheltered
- How to buy gold bullion, should you buy gold bars or coins?
- The important lexicon of gold investors
- Which methods of investing you should avoid if you are risk averse
Whether you’re a cash buyer or want to rollover part of your 401(K) into Gold IRA (or Individual Retirement Account) , please take a few minutes to read through everything on this site to find out what it takes to protect your assets with gold investments quickly and intelligently.
Important Gold Market Jargon
Now that you know the answer to the question, “why gold is a good investment,” you need to learn the lingo. Since your first step towards actually investing in gold will be speaking to a precious metals broker or IRA custodian, you’ll want to know what they’re talking about.
Gold Bullion: refers to gold bars and coins that are in bulk form. It does not refer to jewelry or unrefined gold nuggets.
Gold Spot Price: refers to the daily value of gold traded on the open market. It’s measured by the troy ounce. Throughout the end of 2012 gold was trading at nearly $19,00 per troy ounce.
IRA Approved: refers to gold bars and coins that can be included in your precious metals IRA. They include silver, platinum, palladium, and gold options. Some minted coins and bars that can be included are: Chinese panda, Canadian maple leaf, American Eagles, Australian Kangaroos, Vienna Philharmonics, PAMP Suisse Bars, Credit Suisse Bars, and Johnson Matthey Minted Bullion.
Gold ETF(or Exchange-Traded Funds): refer to the funds that used to track the price of gold, and are traded on the major stock markets. But you never actually hold any physical gold.
401k rollover to IRA: is a process of transferring your retirement saving from a traditional, employer-controlled 401(K) into precious metals IRA, it’s also called Gold IRA rollover, which allows you to keep your savings tax-deferred benefits and have a broader choice of investing physical precious metals.
Mining Stocks: publicly traded stocks that focus on gold or other mining companies.
While most of these terms refer to investments that are relatively safe, there are a few that are risky. More detail is provided below.
Why Is Gold a Great Investment?
Historically speaking, gold has risen in value. For quite some time (up until 1971, actually) gold bullion was considered the backing of financial currency. In 1971, the United States Fed abandoned the gold standard. Since then it has risen greatly in value. Many financial industry experts still feel that gold is an international backing of currency, even if it is only in an unofficial capacity.
Gold and other precious metals cannot be fabricated or produced, like a fiat (paper) currency. This means that when gold is used as the basis of currency, there is little or no inflation or deflation. That’s why gold has risen so sharply in value in the last several decades – global hyper inflation may reduce the value of your paper currency, but gold remains stable.
Gold IRA: One Of The Smartest Retirement Investment Options
If you are not a cash buyer, the Gold IRA is a great way to invest in gold. It provides tax protection (in the form of pre-tax contributions or post-tax contributions). Since you can invest up to $5,000 per year (if you file singly) or $10,000 per year (filing jointly), it’s a great way to reduce your tax burden.
You do have to invest in IRA approved gold options, such as those listed above. You can buy them directly from a Gold IRA custodians or from private gold dealers. It’s generally recommended that you avoid auction sites, like eBay, as there are plenty of counterfeit coins traded there.
Unlike cash buyer, when invested in an IRA, your bullion can’t be stored at home. This means you’ll need to register your precious metals IRA with a bank. In a Custodial Gold IRA the bank only works to file your paperwork and safely store your assets. In an actively managed gold IRA, the bank will do all of that, plus provide an advisor that makes investing suggestions.
How To Buy Gold Bullion
How to buy bullion? Should you buy gold bullion bars or coins? Which is better option? The answer all depends on how you want to approach the process. If you’re looking for more of a thrill, investing in rare, certified coins, such as those certified by PCGS, may be your thing.
These coins trade at values that are in excess of their gold value. The market can contain many frauds, so purchasing coins that are certified is probably your best choice. You can also purchase minted coins and bullion bars, like the American Gold Eagles and Australian Philharmonics listed above.
When buying gold, keep your storage and security in mind for your physical gold. You can store it in your house or bank, keeping it in a free port jurisdiction like Switzerland or Hong Kong is also a great idea. But if you do store your gold in your house, keep quiet about your gold purchases when speaking to friends, family members, and neighbors. Remember – if no one knows you have gold at home, they can’t try to come and steal it from you.
Avoid Mining Stocks and ETFs
When you ask for a gold investment advice, any savvy guru would tell you to avoid mining stocks. They come with big promises of fast riches, much like the casino. The house wins more often than not. Mining stocks are largely speculative in nature.
If you like the thrill of a big gamble, then you may want to look into them. If you’re hoping for something to serve as more of a safe-haven, then rely on gold investment strategies that have provided consistent returns.
Talk to an advisor or dealer about how to invest in gold to learn more about your options, but make sure you read everything on this site first. When you’re done, you’ll know the answer to the question that brought you here. Is gold a best investment for you? – read more to find out!