Figuring out the best investing strategy is never easy. Sure, many experts will tell you about investment opportunities, portfolio allocation, and other important aspects to consider.
But are they the right strategies for you?
For some reason, traditional financial advisors have no problem telling their clients to invest in stocks, bonds, and mutual funds. But they fail to truly help their clients achieve real and lasting portfolio diversity.
That’s when gold IRA investing comes into the picture.
You see, investing in a gold IRA has big benefits that many financial advisors tend to overlook. I’d like to rectify this situation by sharing many of the positives about this investment tactic with you today.
And guess what?
I want my readers to experience fairness and a balanced approach to creating their investment plan. So, I won’t just hit you over the head with every amazing thing about opening a gold IRA.
I’ll also share some of the potential negatives with you. This way you can truly make an informed decision to help determine if this strategy fits with your investment goals.
Sound good? Keep reading to learn the positives and negatives of gold IRA investing.
The Advantages of Gold IRA Investing
As mentioned, there are many advantages to investing in gold as part of your overall investment stratagem for your portfolio.
To help you better understand this style of investing, I’d like to share the biggest advantages with you now. They include:
Portfolio Diversity
Right now, I’d like to start out by focusing on portfolio diversity.
Why?
In times of economic turmoil, maintaining a diversified portfolio is always the smart choice. It’s the best way to prevent all of your investments from failing at the same time.
How so?
Simply put, precious metals investments in gold and silver trade differently during certain economic climates.
As an example, during times of a recession or when the potential exists, the stock market tends to sell off. This means your stock portfolio is going to take a temporary hit. This downward momentum can last for months or years before it recovers.
How do precious metals react in the same environment?
Typically, they react in the opposite manner. Precious metals tend to rise in value when economic turmoil is on the horizon.
And it makes sense if you look at recent history…
After the stock market and housing market crashes in 2008, the value of gold nearly doubled. It didn’t sustain all of its gains, but it settled somewhere between $1200-$1300 per ounce until the next financial crisis.
Enter the coronavirus.
In February 2020, the stock market got wind of a nasty virus. They heard through the grapevine that this virus was going to shut down the economy all over the world.
Before long, the stock market lost roughly 35%-40% of its value.
Guess what happened to the price of gold?
Gold went from roughly $1300 an ounce to $1500 an ounce pretty quickly. And as the months waned on, the value of gold steadily rose until it surpassed the $2000 per ounce mark.
Since then, the value has somewhat pulled back to about $1800 per ounce. But that is still $500 per ounce more than gold was worth just a few years ago.
Ask yourself, “Am I willing to fully invest in stocks and bonds and ride out the eventual downturn? Or should I diversify more portfolio further and have one successful recession proof asset in my possession?”
For those looking for greater diversity, please consider the top gold IRA companies in the industry. You can click here to read my review of the top 10 companies that can help you get started.
Advantageous Gold IRA Tax Breaks Mean Keeping More Money in Your Possession during Retirement
Opening a precious metals IRA means gaining access to specific tax benefits that aren’t available anywhere else. You can only get them through investments owned in a Roth, traditional, or self-directed IRA.
Here’s something that shouldn’t shock anyone: the IRS is rarely generous enough to provide tax loopholes to American citizens. But this is a legal loophole nonetheless. It’s in your best interest to make the most of it.
And, so we’re clear, there’s more than one tax break or potential loophole to access as a gold IRA investor. They include:
- Depending on how you structure the account, you gain access to tax-free or tax-deferred investing.
- In a tax-deferred account, your adjusted gross income is lowered yearly by the amount that you deposit into your IRA. This means paying less taxes on your yearly income and deferring them until retirement. It also means having more money available for compounded growth throughout your working life.
- In a tax-free account, you have the ability to accumulate wealth using deposits that were already taxed. This means everything accumulated within your self-directed gold IRA is yours to keep. The IRS will not charge taxes on this income again, which is a huge benefit.
- In a tax-deferred account, you only pay taxes once you begin taking distributions. At this stage, you’re only required to pay the marginal tax rate and nothing more.
Clearly, the gold IRA investing benefits are numerous and advantageous to your financial health and well-being. Learn more about the top 10 gold IRA companies by reading my detailed review of these businesses.
The Demand for Gold Has Never Been Greater
Cryptocurrencies are a hot topic right now. Big institutional investors, worldwide banks, and other conglomerates are pumping billions of dollars into this industry.
What does this mean for gold, silver, platinum, and palladium? Did everyone forget about these investments?
Absolutely not!
As a matter of fact, the demand for gold is at an all-time high. That’s why the price continues to rise consistently throughout the years.
If no one wanted gold, the value would drop precipitously. But as I explained earlier, nothing is further from the truth. Gold is gaining value and although it may have temporary slowed at the moment, it will resume its upward trajectory.
How do I know?
I know this because world governments acquire gold and other precious metals by the tons each year. In fact, the biggest countries produce gold by the metric ton in the following amounts each year:
- China – 355 metric tons
- Australia – 270 metric tons
- United States – 237 metric tons
- Russia – 200 metric tons
- South Africa – 190 metric tons
- Peru – 150 metric tons
- Canada – 110 metric tons
- Ghana – 100 metric tons
- Indonesia – 100 metric tons
- Uzbekistan – 90 metric tons
Think about it…
Would countries around the world continue producing a failing commodity? No way! They would stop immediately if it didn’t possess any value.
But that’s not the case and that clearly isn’t what’s happening.
Quit wasting time and begin investing in a Gold IRA today. Secure your gold IRA investment working with the top gold companies, who you can read about here.
Potential Disadvantages of Gold IRA Investing
As discussed earlier, I really would like to keep this as fair and balanced as possible. This section will be much smaller than the advantages because the benefits far outweigh the disadvantages in my opinion.
After laying all my cards on the table, I’ve decided that the following situations are potential disadvantages to this investment. They include:
- Required Minimum Distributions (RMD) – some investors believe that required minimum distributions are negative. Why? Roth IRA investors aren’t forced to take required minimum distributions at any age. But non-Roth IRA investors, like gold IRA investors, must begin taking distributions at 70 ½ years old. Personally, at this stage you’re likely going to retire if you haven’t already. So, you’ll more than likely need the money, which makes this requirement no big deal in my opinion.
- Custodian & Storage Fees – two things must happen to buy precious metals for your gold IRA. You must have a qualified custodian acting on your behalf. And you must keep your gold stored in an approved storage facility. Both of these things cost money. Some people aren’t willing to spend the nominal fees for these services. And those people are missing out on a huge opportunity in my opinion. On average, you’ll spend roughly $250 per year for these services. This isn’t asking too much to ensure that your gold is purchased safely and stored securely. In fact, it’ll help you sleep like a baby at night knowing that your investment is protected.
- Collectibles Aren’t Allowed – some investors like buying precious metals collectibles like rare gold and silver coins and bars. According to the IRS, you aren’t allowed to buy collectibles within a precious metals IRA. They have strict rules regarding precious metals and their purity level requirements. In my opinion, this isn’t a big deal. If you want to invest in collectibles, do so at your leisure in your spare time.
Bottom Line
At this stage, I hopefully made the case for gold IRA investing. I believe it’s a safe and sound way to diversify your portfolio and gain tremendous wealth. But as I said earlier, it’s up to you to decide if this is the best investment to meet your needs.
Ultimately, I believe the value of gold will continue to rise in the near future for a few reasons that include:
- The US economy is struggling right now because of the coronavirus
- The United States President and his advisers plan to keep the country locked down for as long as humanly possible
- The US dollar is a sinking mess
- Hyperinflation isn’t too far off
Do what’s necessary to protect your retirement future and minimize your exposure to the US dollar. Learn about the top 10 gold IRA companies by reading my detailed review whenever it suits you.
