Some investors find themselves on the fence regarding precious metals. They believe it’s a great idea to invest in gold and silver, but they often don’t know where to begin.
You might have questions like: “Should I buy precious metals stocks?” Or you might be thinking, “Should I buy physical gold?” Or you may even wonder, “Should I buy gold or silver ETFs?”
No matter what, we only recommend investing in physical precious metals. But to take it a step further, we recommend investing as part of your gold IRA. The tax advantages of an IRA mean you’ll make even greater returns on your gold and silver investments.
So, we’ll take some time to go over the pros and cons of investing in precious metals right now. We’ll tell you why we believe it’s an excellent idea to secure your retirement future. We’ll even share the cons of investing in precious metals the wrong way, which is possible if you aren’t careful.
The Pros of Investing in Gold & Silver (Precious Metals)
As you’ll learn, there are many wide-ranging reasons to buy physical gold and silver for your precious metals IRA. Some of these advantages are impossible to obtain with any other investment type. So, you should find these benefits useful and enticing.
Pay attention to the following:
- Precious metals are tangible assets – most investments these days take place on a computer screen. It’s rare to invest in something that you can hold in the palm of your hand. But that’s exactly what you’ll get when buying physical gold and silver. If treated correctly, your precious metals will never get destroyed in a fire, harmed by water, or lost or stolen. You can’t say the same for paper investments like stock certificates, although they’re typically viewed on a computer screen.
- Gold investments outperform the stock market – many believe this isn’t true, but they are sadly mistaken. Plenty of today’s mainstream advisors believe the stock market outperforms gold. That’s not very accurate though. In fact, over the last 21 years gold has outperformed bonds and stocks by a wide margin. Even better, gold has risen 337%. During this timeframe, the Dow Jones rose by 182%, the S&P 500 rose by 148%, and bonds rose by 69%. Clearly, investing in physical gold in a precious metals IRA was obviously the more fruitful choice.
- You can’t hack or erase physical precious metals – but you can’t say the same thing for digital investments. In fact, hackers are constantly on the prowl to digitally steal money and investments. Even worse, if the online world suddenly went away, your stock investments would disappear without a trace. Physical gold, on the other hand, will withstand the test of time. It’s been around for thousands of years and it isn’t going to disappear anytime soon.
- Precious metals investments are private and confidential – as you know, privacy and confidentiality are at a premium these days. In the digital world, just about anyone can access your information at any time whether you know it or not. But owning physical gold can be the most private and confidential experience in the world. Nobody ever has to know you have a bounty of gold and silver safely tucked away in your gold IRA.
- Buying precious metals doesn’t require specialized knowledge – this is great for casual working class investors. On the other hand, investing in diamonds requires intense specialized skills. You need to know how to determine cut, clarity, color, and authenticity. The same holds true for investing in art like paintings, sculptures, comic books, and many other collectible investments. But buying gold bullion as part of your gold IRA doesn’t require any training or special skills at all.
- Precious metals are a portable investment – you can stick gold coins in your pocket and take them with you everywhere. The same holds true for silver currency. You’re better off keeping them safe and sound with your gold IRA custodian, but at least the option is available. In fact, if you plan to travel with precious metals, you can easily cross borders without any problem at all.
As you can see, there are many reasons to invest in physical precious metals. But to play devil’s advocate, we’ll continue taking a look at the pros and cons of precious metals. We’ll now dive into some of the cons of this investment.
The Cons of Investing in Gold & Silver (Precious Metals)
As much as we love buying gold and silver, there’s a wrong and right way to invest in precious metals. All of the downside risk becomes a problem when you invest the wrong way. With that disclaimer out of the way, the cons include:
- Investing in precious metals by digital means – some investors believe it’s safe to buy gold ETFs and stocks. We vehemently disagree with this sentiment. In fact, we know that buying gold and silver stocks and ETFs is a terribly risky proposition. In particular, mining stocks are scary because you might choose the wrong company. And before you know it, your investment is worthless because the company underperformed.
- Buying physical precious metals without tax advantages – this happens when the investor fails to open a gold IRA. Owning physical precious metals is better than not owning any at all. But buying them and stuffing them in your closet is a foolish way to invest. You need to contact a reputable precious metals IRA company like Regal Assets and open an account right away. The tax advantages alone make this an incredible investment and an exciting way to secure your retirement future.
Clearly, we believe in the power of investing in precious metals. But we don’t want you buying gold stocks, ETFs, or physical precious metals outside of your retirement account. These investments are potentially risky, dangerous, and foolish to say the least.
So take some time to look into opening a precious metals IRA. There are many great precious metals IRA companies to choose from so do your research.
Our favorite is Regal Assets. You can contact them today to get a free investor’s kit, a free DVD, and a free 10 year anniversary silver coin.
Do you have any questions about the pros and cons of investing in precious metals? Ask below!
Thank you for this article! I am not too knowledgeable on investing. I simply tell my investor high-risk, medium-risk or low-risk. However… I do buy physical gold and keep it in a safe that is NOT located within my home. I feel that if a major natural disaster were to occur that mass-hysteria would erupt. My fear is that banks, etc. would go down or be taken over and people may lose access to investments. I know, however, that I can always access my safe and have a way of taking care of my family and I. You pointed out some valuable information and I appreciate it. Thank you.
Hello Dr. Baker! Thank you for dropping by and sharing your experience with us on investing in gold! I am glad that you invest in physical gold, even though it is not through an IRA. I would still suggest, if you are a US resident, that you invest in a self-directed gold IRA. Your fear that a major disaster may occur is a real one and it is still safer to store your gold in the care of the best gold IRA custodians rather than holding it yourself. However, you are still on the right track by investing in physical gold, even though you are holding it yourself (which is still a little risky). Thank you for dropping by and sharing your experience with us, Dr. Baker!
Thank you for this wonderful and nice post, I think investment made in the right direction always come with lesser risks. Thanks for introducing this IRA options. I really think it will yield better options than investing in physical gold. I will read more about the terms and conditions involved.
Hello Charles! The Gold IRA option I provided lets you invest in physical gold without having to hold it yourself. It is the recommended way to invest in physical gold. Physical gold and other precious metals are a good investment to hold in times of dire financial crisis. Thank you for dropping by with the comment!
The gold and silver business is one i have looked at for a long time now with high hopes that I’ll go into it some day as some of my friends are hitting it as well. How ever my little knowledge about this business have been my only fe ohar. I still wish to learn more before going into it. From your post I have gained quite some good knowledge about investing in them. Also i will check the suggested link to get book, videos that can help me with understanding it better.
Hello Dane! Feel free to view my website for more information about how to invest in physical gold through a self-directed IRA. It’s always best to do your due research before getting involved with any investment and all you need to learn about this type of investment is that it is simply the best. I do suggest you do as much research as you can to gain confidence in it before proceeding. Thank you for dropping by with the comment!
Excellent article on Investment,it is a great thing to plan for the future and in this era of technology investing in intangible might be dangerous but tangible asset as you have explained is awesome,the advantages are countless because it can not be hacked or wiped off,this kind of assets tends to increase in value everyday,to me its a means of planting for the harvest day,thank you for sharing this valuable post.
Hello Abayomi! Indeed, in these days it is a much better option to invest in tangible assets such as the ones they offer in a self-directed IRA. You can invest in physical precious metals, land, oil & gas, and real estate through a self-directed IRA. In the US, it is a much better option than all the other retirement options available. Thank you for dropping by with the comment!
Wow, this really interesting. I never thought of investing in precious stone maybe because its a very expensive business that needs a lot of Capital. Unlike online investment and the likes, investing in precious stone is a tangible commodity based deal, it can’t be sugar coated, since it can be seen and confirmed. The pros are really good and enticing. Even though the investment in precious stone is a very profitable one, I believe it risky and dangerous as well. This post has been useful, thanks.
Hello Jones and thank you for the feedback! Indeed, investing in precious metals is the best way to hedge your portfolio against financial crisis that lie ahead. However, there is a drawback to them and it is investing in them the wrong way. Basically, if you are not investing in physical precious metals through a self-directed IRA, you are doing it wrong! Investing in precious metals stocks and even ETF’s is just the same as investing in paper currency. Thank you for dropping by with the comment, Jones!
It is a good idea to invest in precious metals as part of a diversified portfolio, preferably as gold assets as you suggest. You covered the advantages well. However, investors need to be aware of some of the disadvantages as well. Investors should be aware of how metals are priced as well as storage costs associated with storing precious metals. Precious metals are the type of investment that depends on timing and patience. Gold prices are volatile in the short term, but good investments for the long term. So people near or in retirement should not buy gold because of price volatility because it could take decades to recover from the ups and downs.
Hello Glen! I actually agree with almost everything you said until the very last part. Investing in physical precious metals is a good idea for people nearing retirement precisely because they are looking for an investment that is long-term, not something that they can sell when the price shoots up at an unknown time. Gold and physical precious metals fits the bill for what they are looking for as long-term solid investments. It is the retirement people that invest in physical precious metals IRA! If you look at the gold prices, they are consistently going up in the long term because of quantitative easing and the massive debt the US is accumulating. Those things are not going to change anytime soon. A precious metals IRA is a good thing for retirement planners to consider. Thank you for the feedback, however, Glen!
I have heard many financial experts talk about investing in precious metals and the thing I always hear is that you need physical medals. If you don’t have it in your possession then you don’t own it.
The bottom line in my opinion is that you don’t want to be all in precious metals but you don’t want to find yourself without any as well. You need a balanced approach to investments and “physical” precious metals is one piece to your financial investments, in my personal opinion.
Hello Rick! I hear what you are saying that physical precious metals should be part of a solid diversified portfolio. I do agree with you! My personal preference is to make a portfolio that is precious metals heavy but preferences can be different with different investors. Also, the best way to invest in physical precious metals is through an IRA. You actually own the physical precious metals, but you do not have to worry about being taxed on them nor security matters because they are held at a depository of your choice. Thank you for dropping by with the feedback, Rick!