A precious metals IRA or a gold IRA is nothing more than an investment fund, that includes gold and other precious metals, approved by the IRS. The approved metals are gold, silver, platinum or palladium. When a person decides to open a gold Individual Retirement Account, he/she will receive a custodian, who will manage the account. The gold IRA functions as any other IRA, with a small difference. The investment fund is not represented only by paper assets and the owner can possess physical gold (bars, bullion, coins etc.). The terminology “gold IRA” is somehow generic. This type of investment fund was called like that, because gold is the most popular precious metal. However, a gold IRA could include any of the above stated metals. However, even if it sounds like a safe investment, a gold IRA could present some risks. Bellow, we will provide a detailed explanation of how to open a gold IRA, in order to minimize the risks.
1) Find a good bullion dealer
This is the first but most important step. In order to fully benefit from your gold IRA, you need to find a good, experienced gold IRA custodian. A skilled broker will explain you where to invest your capital and will even get some discounts for the gold you’re about to buy. The broker will also ensure that the gold is valid and can be accepted by the IRS. There are some numismatic gold coins, that cannot be included in any IRA fund.
2) Research the market
Investing in a gold IRA should be a long process and you need to perform some research before actually doing it. Watch the market and observe how the gold value increases / decreases. Try to find an absolute minimum and buy the gold when its price has the lowest value. This way, you will be able to purchase more gold, for the same amount of money. When you do the purchase, you should have a specialist by you. This is the only way to be sure that the gold is valid and can be included in IRA.
3) Investigate your future dealer and its company
This industry is full of scam artists. That’s why, you need to investigate any potential partner, to see if you’re dealing with a legit person. You can start by asking him / her a few questions about the investment strategy, its previous experience and even some information about previous customers. You can always ask your family and friends for a referral, but this won’t be enough. Don’t accept any empty promises and get everything in writing. You should also find some information about the company. You can go to your Local Chamber of Commerce to do that. There, you will notice if there are any complains filled against the company.
4) Keep a close business relation with your partners
We live in a volatile economy and many things can change overnight. That’s why, you need to keep yourself informed, and to be aware of any event that could affect your gold IRA. Don’t hesitate to contact your dealer or your administrator, whenever you have some uncertainties.
In the end, you have to remember that a gold IRA will not generate enormous profits in a short time. However, this is the safest form of investment and it presents little risk.