Can I Hold My Own Gold?
Storage can be an obstacle when it comes to investing in gold. Finding a safe place in which to keep it can be challenging and expensive.
As much as possible, you should keep the location of your bullion storage at home confidential as doing so could result in a 10% distribution penalty for gold purchased through an IRA account.
It’s a hedge against inflation
As inflation reduces your purchasing power, investing a percentage of your savings in physical gold may provide protection. Unlike digital assets that can be easily compromised or erased by hackers or thieves, physical gold serves as an alternative way of safeguarding wealth and maintaining its value.
Although gold is widely considered to be an effective hedge against inflation, its performance doesn’t remain consistent in all markets; in fact, since earning this label in the 1970s it has shown less correlation with inflation.
However, many retirement investors use gold as an additional hedge against inflation – this is particularly relevant for younger investors with decades to save for retirement and can better withstand inflation than older folks.
It’s a hedge against deflation
As investors straddle this tenuous economic balance, many are worried about inflation and deflation. Gold has traditionally been seen as an effective hedge against inflation since it increases in value when purchasing power erodes, though physical gold ownership poses numerous risks in terms of storage and logistics.
Gold has long been associated with its ability to protect investors against inflation; what remains less understood, however, is how well it would perform during a period of deflation. According to Morningstar portfolio strategist Amy Arnott’s prediction of below-average returns during such environments, gold might even prove less than ideal.
Investors looking to protect themselves against possible deflation should consider diversifying their portfolio with high-quality dividend-paying stocks and cash as part of a defensive measure, in addition to cash investments that provide steady income streams. By diversifying your portfolio with this variety of assets, you will give yourself flexibility in changing up the investment strategy when needed.
It’s a diversifier
Gold’s unique qualities make it an invaluable addition to any portfolio. Its uncorrelated price movements and negative correlation with declining equities provide a reliable hedge during times of turmoil while increasing overall returns – benefits highlighted in a new explainer video by World Gold Council and Moneycontrol.
As a physical asset, gold is easily convertible to cash and portable; you can take it wherever you go! Storage options at home or securely stored within an institution such as a safe deposit box or vault are both cost-effective options; international gold storage may also offer investment opportunities outside your own country of residency.
Gold investing, like any insurance policy, comes at a small expense – yet its peace-of-mind and security far outweigh this minimal fee. Recent global financial crises demonstrate how prudent preparation pays off.
It’s a safe place to store cash
Gold can be an attractive asset, but you should keep in mind that it does not generate income, making other investments necessary for cash flow purposes – stocks and mutual funds may offer dividends that you can withdraw when needed; while holding gold only increases in value over time.
One of the greatest risks of physical gold storage is being unable to access it if something goes wrong, which could be problematic if something like illness, incapacitation or death arise. To best safeguard your wealth and ensure easy accessibility of its storage location.
Gold can also be held in an Individual Retirement Account (IRA), though you’ll need a custodian who specializes in self-directed IRAs in order to store it safely under IRS guidelines – physical gold should never be kept at home but instead must be stored at an approved depository under your LLC name.