Can I Hold My Own Gold?
Although owning physical gold can be emotionally satisfying, its investment carries certain disadvantages including storage and insurance costs as well as being dependent on price increases to yield profits.
Additionally, the IRS prohibits individuals from storing precious metals at home; doing so would count as an act of distribution and subject you to a 10% penalty if you’re over 59.5.
Investing in Gold
Gold has historically provided investors with protection in times of high inflation and market turbulence, so many choose to incorporate physical gold into their portfolios during times of extreme turbulence or rising inflation. However, unlike stocks or mutual funds which produce cash flow for investment purposes, physical gold does not generate cash flows so should only be added with caution in small quantities and carefully considered by your portfolio manager.
If you’re curious about investing in gold but are hesitant to take the leap into physical ownership, an exchange-traded fund (ETF) or mutual fund may be more suitable. These instruments allow traders to trade on the open market like any other stock without incurring extra costs associated with physical ownership like security and storage fees.
ETFs or funds offer another advantage over physical gold ownership: their liquidity. Reselling physical gold quickly and at full value may prove challenging; ETFs and funds may not protect against seizure by government as effectively.
Buying Gold Stocks or Funds
Some investors choose to invest in gold via shares of mining companies or mutual funds that invest directly in physical bullion, though their price can fluctuate and may not be as liquid.
Gold stocks and funds that invest in mining companies are an attractive way to diversify an investor’s portfolio. Their prices depend on factors like leadership, past performance and the amount of gold produced annually by each mining firm.
Gold coins or bars certified to be genuine by trusted dealers can make for an excellent investment, but you will need a secure space in which to store it and may incur insurance premiums; make sure your homeowner’s policy covers theft risks for more peace of mind.
Buying Gold Bullion
Bulk gold can be purchased directly from a mint, although this option is only open to authorized purchasers who meet certain professional and financial criteria. Investors looking for direct exposure may also consider investing in precious metal-backed securities like ETFs, mutual funds and futures contracts as an indirect way of accessing bulk gold purchases.
When buying bullion, it is essential to find a dealer with competitive pricing and excellent customer service. Buyers should avoid dealers charging exorbitant fees for shipping, insurance and sales markup.
Alternatively, buyers who do not wish to take physical possession of their bullion have storage options through specialist programs that may reduce premiums charged by dealers for holding it in vaults. However, these services come at additional costs such as annual storage fees.
APMEX accepts various payment forms, including credit and debit cards, bank wire transfers, eChecks and Bitcoin. Furthermore, the company provides a seven-day return policy along with a gold bullion expert to answer any queries from buyers as well as an easy buyback process.
Gold can serve as both an inflation and wealth growth hedge and addition to an individual retirement account (IRA) portfolio, though investors should carefully consider its suitability for their circumstances and consider investing in multiple forms of gold as part of their diversified strategy.
Self-directed IRAs allow individuals to manage their own investments and purchase physical precious metals at competitive prices. These accounts typically feature secure storage and insurance coverage for the precious metals held within.
Traditional, SEP, and Roth gold IRAs offer pretax deductibility; Roth gold IRAs allow tax-free withdrawals upon retirement. Investors should consult their financial advisor when deciding the type of gold IRA that’s best suited to them; fees and minimum investment requirements differ by company but may range as low as $1,000 or more; some charge an initial setup fee as well as custodian and storage fees annually.