Nobody knows when the next financial disaster will occur, but one thing is for sure, the market is sure to have its ups and downs. Faced with the consequences of recent events, where people who had limited diversity on their investment portfolios and lost everything, now may be a good time to look more at spreading your eggs amongst several baskets. The fact is another meltdown could happen at any time, and people who invest in just paper assets like stocks and bonds, will feel that the most. Trillions of dollars gone in just 15 months in 2008/2009. Next time what if it is even worse?
The US Dollar
There was a time when the US Dollar was strong; the United States was a global creditor. Now the debt this country faces is more than what all of the European Union owes. Paper money is printed at a rate of $85 billion a month according to Forbes and the dollar is down to a value of 85 cents. With all that money being printed, essentials are going up in price. There are even countries like China taking steps to stop using the dollar as the primary global currency (world’s reserve currency). When other countries stop trusting the value of your money there are big problems coming.
With an economy that is still unstable and a currency that is dropping in value what should investors do to protect and generate wealth for their future? Well countries like Russia and China are moving away from the dollar and into gold.
Why invest in gold?
In the last twelve years gold has consistently risen in value. No other investment has made that kind of consistent increase over such a long stretch of time. In 2013 and 2014 that increase has stalled but that can only mean that gold is due another increase in value soon. Now is the time to invest before prices rise.
Gold’s history as a valuable investment has been proven over centuries of history, before even the modern financial system. Five thousand years of watching gold shows people will always place a value on it, and that value steadily increases. For a long time people and countries use gold as a safety net against inflation, a falling stock market and the devaluation of paper currency. Since the start of the new millennium gold has increased in value by an amazing 365%.
A gold IRA allows you to buy and sell gold assets, earning a very nice income by doing so. There are some restrictions on the type of gold that is allowed in this form of IRA but includes stamped gold coins and bars like the American gold coin and gold certificates. With the chance of gold going down in value very slim a gold IRA gives you a back up investment in case something happens to the rest.
Gold is a rare precious metal and for that reason it appeals to buyers and retains its value making it a stable investment. Each year its value tends to increase and it is not affected by instability or weak economies. It is a commodity investors can rely on even in a crisis. It does not corrode so can be stored indefinitely and is used in various industries, from art to jewelery to electronics even. Because it can be used by such a wide range of people, its beauty and its rarity when less gold is available prices go up. A gold IRA would make a great investment for your retirement.
To be able to start a gold IRA you either need to make a transfer or do a roll over. A transfer happens when a custodian of gold transfers some or all of his assets to another custodian. A roll over happens when a custodian talks to the administrator of the IRA account to transfer his assets to another directly.
The right gold IRA company
While there are many companies that can do a gold IRA roll over for you not all of them may be the best option for you. Here is some advice on what to look for.
Experience – Look into whether that company has much experience in this area. There is a risk in dealing with people who are new to this form of investment. See if the staffs there are knowledgeable and can answer questions you put to them.
Better Business Bureau – Look into what rating the company has been given by the BBB and that will give you an idea of how well they perform and how reliable and trustworthy they are. If there have been complaints made look into them to see what those were about. If it is just about poor customer service you may give less weight to such complaints, but if they are about fraud or such then this should be a warning light not to deal with that company. Any gold you buy must be approved by the IRS and you can use Trustlink to check too.
Customer service – If you have checked and the company is one to be relied upon, you may want to see what its customer service is like. You will want a company who will answer your questions in a timely manner, be pleasant, courteous, and so on. Otherwise you may be chasing them all the time to return your calls.
Charges and fees – Different companies have different fees and charges and you should find one who is reasonable in both. Pricing should be according to what the going market rate is, and there should be the option to buy back without commission. Some companies will wave some of the fees like shipping, depository, insurance and custodian fees. Some will even offer waivers for as long as three years, so this could save you a lot of money.
Precious Metals Allowed in IRA
There are various terms for a gold IRA, self directed IRA, Gold 401k, or a Roth IRA for example, and you do not have to just invest in gold to have one, you can invest in any accepted precious metal, platinum or silver for example. But gold tends to be the one that has fewer fluctuations than platinum but more value than silver, so gold is a good choice.
Before 1997 you could only have Silver Eagles or American Gold in a Gold IRA as per the regulations, but then came the Tax Payer Relief Act which allowed investors to diversify more their gold 401k. There are still rules on what form your precious metals can take but there are more options since the 1997 act. Gold and silver bullion coins as well as bars can be included as can palladium and platinum, but one of the more popular Gold IRA options amongst investors is the American Eagle Gold bullion coin.
Another coin that is permissible is the Canadian Maple Leaf coin and the American Eagle was actually created in 1986 in America to compete with the Canadian one. Other coins that are permissible are the American Buffalo, the Austrian Philharmonic and the Australian Kangaroo. Investments that are restricted in an IRA investment are the Mexican 50 Peso coin, the Krugerrand and rarer coins like the British Sovereign, the Swiss Franc, the Liberty head and the Saint Gaudens.
In 2010 Silver had the privilege of being the precious metal that outperformed all other metals and investing in it became very popular. Options you have that are allowed in a Self Directed IRA include the American Eagle Silver Bullion coin, the Austrian Vienna Philharmonic, the Mexican Liberated coin, the Australian Kookaburra and the Canadian Maple Leaf. If a bar or privately minted silver round has been accredited by Comex or NYSE these too can be invested in.
Platinum and Palladium
If you want to invest in Palladium make sure the bars or coins are made by a national mint. Platinum that can be invested in include the Australian Koala, the Isle of Man Noble, the American Eagle Platinum coin and the Canadian Maple leaf platinum coin.
If you are looking for a way to protect your future and diversify your investments adding a Self Directed or Gold IRA to your portfolio is a strong option. And as long as your 401k meets the specified requirements it is an easy thing to get started!
Before you invest
With all of that you now need to decide: