Does Dave Ramsey Recommend Gold?

Does Dave Ramsey recommend gold

Dave Ramsey recently wrote an article explaining why investing in precious metals was never a wise move, yet we will challenge some of his claims and demonstrate why investing in gold may not always be wise.

First, Ramsey states that precious metals are no protection against inflation; although this statement may be accurate, it’s equally essential to look at what caused inflation.

Historical performance

Gold has historically seen strong gains during times of financial distress, such as global inflation or currency devaluation, due to its low correlation with stocks – making it an excellent asset class to diversify your portfolio with. But remember, unlike stocks or bonds, gold does not generate income and may fluctuate substantially in short term trading.

Although gold enjoyed impressive returns during the 1970s and early 2000s, its real-world performance has often fallen short. After inflation-adjustment from 1980 through 1999, one dollar invested in gold grew only 2.7% – far lower than S&P 500 index 8.9% growth or US small cap stocks 10.7% gains. Furthermore, recent years have witnessed inflation outpacing gold’s price increases.

Tax implications

Gold has long been an attractive investment option to diversify a portfolio, yet its tax implications can be complex. When selling it for more than its purchase price, capital gains tax may apply; although there may be exemptions. Before investing in precious metals it would be prudent to consult a financial expert beforehand.

Consideration should also be given to the annual costs associated with owning gold, as these fees can eat into after-tax returns and it is worthwhile comparing total costs across coins, mutual funds and futures ETFs to make an informed decision about your investment. Furthermore, records of precious metal purchases and sales should be maintained for tax regulations purposes.

Storage options

Private depository providers offer the ideal way to secure precious metals, with 24/7 access and typically charging an annual fee which typically includes insurance coverage; some may additionally assess transaction or storage fees separately.

Keep in mind that less people should know about your gold, the better it will be stored. Also important when choosing where to keep it is your comfort level and security of home; some hide their gold in fake cookie jars or books with cutout pages for ease of access; however these methods won’t help prevent burglaries so finding a location that offers both safety and easy accessibility should a crisis arise is key.

While precious metals have historically provided reliable investment returns, no guarantees can be given as to their performance each year. That is why diversifying your investments is essential and gold can make an excellent addition to a diversified portfolio in times of instability or change.

Investment options

As there are various investment options for gold, investors should thoroughly assess all possible considerations before making their choice. It is crucial that they evaluate purpose of investment, risk tolerance and how much to dedicate towards gold (experts typically suggest not exceeding 10%).

Physical investments like jewelry, coins and bars can be costly investments as you must pay transaction and processing fees as well as storage costs. Furthermore, selling physical gold may involve waiting until an appropriate buyer comes along who offers you an acceptable price.

Investors can diversify their portfolios with gold funds, which invest directly in gold. These funds have an expense ratio and their value follows its price, although they do not qualify for lower long-term capital gains rates than stocks do and may not provide as high an ROI.

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