As you are about to learn, the benefits of investing in precious metals are indeed numerous. Even more important, this investing style provides an alternative to traditional stocks, bonds, mutual funds, and T-bills. So it makes sense to learn about this alternative and the reasons why it’s such a powerful option for retirement investors.
Believe it or not, there are so many reasons to invest in a precious metals IRA that they’re hard to count. But we’ll do our best to share the major advantages of this investment style with you below.
Please keep reading to discover the truth about opening a gold IRA account.
Benefit #1: Portfolio Diversification
Whether the market is soaring or the economy is struggling, your portfolio needs diversification. In fact, having a diversified portfolio is the golden rule that every successful investor follows religiously.
Why? Well, a diversified portfolio provides a number of powerful advantages. It can help your retirement portfolio in the following ways:
- Diversification protects your overall portfolio.
- Diversification leads to exponential growth.
- Diversification is the key to creating wealth.
- Diversification helps absorb financial shocks during times of economic crisis.
- Diversification is a strategic way to balance your portfolio.
- Diversification means not being overweight in any one asset class.
- Diversification means some of your investments make positive gains during a down market.
And we could continue to go on but we’ll stop right there. You might not know this, but having holdings that play off of one another is important. It’s the only way to maintain a balanced portfolio.
Benefit #2: The Value of Diversification through Gold Performance during Times of Economic Crisis
As an example, a diversified precious metals IRA means having an excellent hedge against a downturn in the stock market. Are you unconvinced? If so, take a look at these critical facts and figures.
During the biggest times of economic turmoil over the last 35 years, the stock market has suffered major declines. While these stock market crashes were taking place, gold prices netted positive gains. In fact, here’s exactly what happened:
- Black Monday 1987: the stock market (DJIA) loses 38.9% of its value. Gold prices rise by more than 5%. Gold outperforms stocks by a ratio of 45 to 1.
- Iraq-Kuwait War 1990: the stock market (DJIA) loses 22.5% of its value. Gold prices rise by more than 7 ½%. Gold outperforms stocks by a ratio of 31 to 1.
- Dot Com Crash 2001: the stock market (DJIA) loses 27% of its value. Gold prices rise by more than 1%. Gold outperforms stocks by a ratio of 29 to 1.
- Financial Crisis 2008: the stock market (DJIA) loses 34% of its value. Gold prices rise by more than 5%. Gold outperforms stocks by a ratio of 40 to 1.
The benefits of a diversified portfolio are quite clear based on the facts and figures mentioned above. If you owned gold during these difficult time periods, your investment would have gained value. Your overall portfolio wouldn’t have suffered nearly as much as it would’ve if you only owned stocks.
Benefit #3: It’s Similar to Having an Insurance Policy Protecting Your Wealth
Many investors consider owning physical precious metals in a gold IRA an insurance policy for their retirement. Why? Gold and silver have held major significance throughout the world since their discovery thousands of years ago.
Can you say the same for paper assets? How about mutual funds? The stock market? Your traditional 401(k) plan? Not really since their value is all based on faith and nothing more.
Gold and silver are tangible physical assets that you can hold in the palm of your hand. And humans have used precious metals to trade for goods and services going back to the days of ancient Egypt.
Let’s look at the stock market as an example. Say you invested your entire portfolio into XYZ Corporation. All of your wealth is now tied into this one company.
What happens if they go out of business? Or they get caught performing shady accounting practices? Or you find out the CEO embezzled hundreds of millions of dollars?
If you guessed that your stock could become completely worthless, you guessed correctly. You could end up with nothing if the worst were ever to happen.
On the other hand, owning physical silver and gold will never put you in this situation. Its value is never going to be reduced to zero. Owning a precious metals IRA stocked with physical gold has nothing to do with owning a company. So gold and silver can never go out of business and cost you everything you’ve worked for your entire life.
Benefit #4: It Provides Protection for Paper Assets
A precious metals IRA also provides account holders insurance against inflation. Many investments are incredibly vulnerable to inflation. Some of the more popular vulnerable investment types include:
- mutual funds
- real estate
- index funds
- and many others
Each one of the investments mentioned above is known as paper assets. When the economy suffers and inflation rears its ugly head, these investments tend to lose value.
Gold and other precious metals experience the opposite effect. They tend to move in the opposite direction and gain value while these investments falter or fail.
So yes, gold IRAs protect portfolios against paper asset downturns and also act as an insurance policy against inflation.
Benefit #5: A Self-Directed Precious Metals IRA Gives You Complete Control over Your Investments
One of the benefits of investing in precious metals is doing so through a self-directed IRA. This investment vehicle puts you in the driver’s seat. You maintain total control of every decision for this investment account.
In many instances, your 401(k) plan or mutual fund has a fund manager that makes all of the investment decisions. You have to rely on someone else to earn additional wealth for you and your loved ones. Is this really a great idea?
Most people understand that no one cares about their money as much as they do. So the beauty of a self-directed precious metals IRA is you have complete control over all of your investment choices. You get to pick and choose which types of investments to purchase. And you can better diversify your portfolio this way.
Fund custodians are typically locked into predetermined asset groups. They invest a certain way and purchase certain asset groups every time. Sometimes this could be very lucrative. At other times, this could lead to major disaster and financial ruin.
A precious metals IRA provides the account holder with flexibility. You have the opportunity to take full control over your investments. You are in charge and you get to diversify your retirement account in whatever way you see fit.
Owning gold and other precious metals is the perfect way to diversify your portfolio while growing your retirement account at the same time. There is no substitute for owning physical silver and gold.
Check out our top 10 list of the best gold companies in the industry today to begin investing right away.
Benefit #6: A Precious Metals IRA Offers Incredible Growth Potential
Over nearly the past 50 years, gold has risen in value consistently over this timeframe. As a matter of fact, compounded gold returns have reaped big rewards for those smart enough to take the leap. Truth be told, these returns have even surpassed inflation and short-term bonds.
The compounded gold returns include:
- 7.76% since 1971
- 4.54% average per year for the last 25 years
- 10.11% average per year for the last 10 years
These compounded returns mean massive gains over time. That’s why a precious metals IRA is so important. You have to be willing to invest for the long term. You have to buy and hold physical gold and allow it to accrue value as time passes.
So when it comes time to retire, you’ll be sitting on top of a very healthy nest egg. And you and your loved ones can retire in comfort without ever worrying about money as you get older.
To learn more about the top precious metals companies in business today, please view our top 10 list right now.
Regal Assets: The Only Choice for Precious Metals IRA Investors
Now that you understand the benefits, it’s time to begin opening your gold IRA. Our tried and true recommendation Regal Assets has helped thousands of people get started over the last 10+ years.
We recommend this company over the competition for many reasons. Some of the best reasons to choose Regal Assets include:
- They are an official member of the Forbes Finance Council.
- They have initiated hundreds of millions of dollars in retirement account transfers.
- They are the top rated company in the gold business for the past 10 years in a row.
- They maintain an A + rating with the Better Business Bureau and zero complaints.
- They also maintain an AAA rating with the Business Consumer Alliance and zero complaints.
- They provide segregated storage, which means your investments are stored in a separate vault from other investors.
- They are willing to buy back your precious metals and provide payment within 24 hours of the sale.
To get started, read our full review of Regal Assets here and sign up for their free gold investor’s kit. From there, you’ll begin setting up your IRA account with the help of their knowledgeable and experienced staff.
I used to work for precious metal company and I have to say that the a lot of people are investing in these precious metals. I do have a couple of both silver and gold bullion myself. The gold performance is definitely keeps going up. (I like to stalk kitco) I think it is best to just put your eggs in a different baskets, when that rainy days come you are ready for anything 🙂
Hello Nuttanee! I do agree that it is best to keep your eggs in different baskets and gold and silver bullion should be a must in a healthy portfolio. The gold performance will probably increase even more because of the recent virus because gold tends to go up during crisis times. Thank you for the feedback, Nuttanee!
I have experience in investing in stocks and stock options and real estate but this is the first time I’ve heard of this investment vehicle. I’ve traded Silver and Gold ETFs with mixed results. Apparently there are numerous advantages in including this investment when diversifying. Thank you for sharing this information!
Hello Sonny! In a self directed gold IRA you can also invest in stocks, ETFs and real estate but also in physical gold and silver bullion. We recommend them more than gold and silver ETFs with which you have had experience with because you’re not actually investing in the physical bullion itself when you invest in ETFs. Thank you for the feedback and you’re welcome, Sonny!
Hello there,thanks for this awesome article it would be of great help to the public as it has been of help to me.i really like investment as they proofs of patients and hard work..and I must tell precious metals are the best way to invest as they are life time streams of income.
Hello Feji ben! Yes, it would be awesome if many more people learned about investing in precious metals. Thank you for the compliment and the feedback, Feji ben!
The idea of portfolio diversification is really appealing to me. I’ve closely followed investment tips since I was I made aware of its benefits. Creating a gold IRA portfolio is something I’m not too familiar with, but the benefits are clearly impressive. I particularly like the idea that it actually provides protection for paper based assets. This has been really informative. Great post
Hello Rhain! Indeed investing in gold and silver bullion will provide protection for your paper based assets. Precious metals tend to do well especially when paper based assets aren’t. Thank you for the compliment and the feedback, Rhain!
The large industrial application of silver, platinum and palladium has led to a situation where the total stock of these precious metals is incomparably smaller than the amount of gold stock existing globally. However, their price is lower than the price of gold, which is illogical for many investors.Others believe that the tax policies of some countries in the world are in favor of gold. Thank for the post.
Hello Kozakiv! Indeed, even though the stock of the other precious metals is way smaller than that of gold, investors still tend to buy other precious metals besides gold. This is mostly for portfolio diversification. I didn’t know that many believe that the tax policies of some countries in the world are in favor of gold. Thank you for the feedback, Kozakiv!
I have to admit I had never really considered investing in gold or silver, but after reading your article it seems like a really wise option. Really informative article. What convinced me was the positive gains following crashes and the growth. I’m definitely going to look into it. It’s smart to diversify. Thanks
Hello Martine! Indeed it is a wise choice to diversify and it’s best to invest in gold and silver during times like now when there is a global crisis. Thank you for the feedback, Martine!
Great info found out quite a lot about investing into precious metals. I have looked into bit coin and investing but dont really understand what i am looking at do you have any recommeded pages on your site i could take a look at and maybe invest in.
thanks for all the info
Hi Jon! If you want more information about what a gold IRA is, you can take a look here. It is our page on why the gold IRA is the best way to invest in gold. Our other recommended page is our top 10 gold IRA companies page. You can learn about the best gold IRA companies in the industry and invest with the best if you do make the decision to do so. Thank you for your feedback, Jon!
Hey. Woah, this is cool. I have never thought about this option when it comes to investing in your own financial future. It makes absolute sense to me. I’m gonna read your full review of the Regal Assets as well and hopefully understand everything a bit better. This is all very new to me but I guess you can’t start ‘too early’ thinking about how you wanna live when retired.
Hello Jonas! I’m glad that my article opened your eyes to the possibility of investing in a gold IRA! I hope you find my review informative and make the best decision for yourself. Indeed, there is never a “too early” stage when thinking about how to live when you are retired. Thank you for the feedback, Jonas!
Thank you for your thorough information regarding precious metals IRAs.
I read the information about roll-overs verses transfers. Would you recommend one over the other? I wasn’t quite clear on that.
It is always good to diversify. Would you recommend having an IRA including all four types of precious metals. If so, do you have recommendations for what percentages of your IRA should be in each kind of metal?
Again, thank you for your info.
Hello Randy! When deciding between rollovers and transfers, it depends on what you want to do with your previous investment vehicle. If you want to keep a part of it, i would recommend transferring the funds to your gold IRA, and if you want to completely replace it, I would recommend rolling over the funds and doing it within the 60 day timeframe. As for the diversification question, I do not have a specific proportion that I recommend, but in my personal opinion it is best to hold the most gold, then silver, then platinum and palladium. Thank you for the feedback and the inquiries, Randy!
Hello David. Thank you for taking out your time to share this helpful post showing us the benefits of investing in precious metals IRA. The benefits are so numerous and lovely. I love the diversified portfolio, wealth insurance, incredible growth potential and most importantly for me is control. Really nice benefits.
Hello MrBlizy and thank you for the feedback and the compliment! There are indeed many benefits in investing in a precious metals IRA and you pointed that out correctly. Thank you for dropping by!
This is really educating. I’ve never known that investment in gold and precious metals helps in the long run. Definitely, this is the best investment that one can give for retirement. This is just by far better than paper asset during financial crisis. Your recommendation of opening an IRA account, is it available worldwide?
Hello Leon! Indeed, opening a gold IRA is better than all paper investments you can make but it is only available for US residents unfortunately. There are probably other alternatives to invest in gold and precious metals outside the US but a gold IRA is only for US residents. Thank you for dropping by with your feedback and inquiry, Leon!