Is Gold still a Good Investment?
There are many different types of investments out there from stocks to IRA to precious metals. Precious metals were one of the original forms of currency and investment but have long been replaced by investments such as stocks. There have always been people who have invested in gold, silver, and other precious metals but they have long been touted as crazy or rich fanatics who have nothing better to spend their money on. Gold and other precious metals are a valuable asset though and deserve a good thought when deciding what to invest in.
While the price for gold right now is on a downwards trend it never stays down for long. The last time it went down in value was April 2001 and by May 2001 it was already on its way back up. This is a pattern that has repeated throughout history. Gold is one of the investments that has never stayed down.
Stocks have been a big investment in recent history but they aren’t a very reliable option. In July of 2015 the stock market dropped 800 points. If the market or the world economy collapses, stocks or other non-tangible investments will leave you with nothing.
One of the biggest fears among investors right now is hyperinflation, that the face value of the dollar will go way down making savings and bank accounts worth less. Gold may have a face value but because it is a precious metal it is separate from that of currency. During a time of hyperinflation gold will continue to be a cost equivalent to the time. This also causes it to hold stable during most minor fluctuations too.
When other investments are doing well gold tends to be at its most affordable prices then once the economy starts to have problems the price of gold goes up. This happened in the 1970’s, 2000, and 2008. Right now gold is in another declining period as the economy is getting better. It’s a great time to consider investing in gold. One of the safest and best ways to invest in gold is to create a Gold IRA. An IRA is a retirement fund also known as an Individual Retirement Account.
These accounts are setup to help with taxes. Many of them have no upfront taxes or reduced taxes.
Most precious metals are available in a variety of forms. The most common form is called bullion. A bullion is a rectangular piece of gold with an imprinting on the top, which will display the weight and quality of the gold. It will also present a stamp on the top as to where the bullion came from. Bullion, like other sources of gold are 99.99% pure.
The next most popular gold investment for gold IRAs is gold coins. Gold coins come in a variety of sizes and designs. The coins will state the weight on them and where they are from. Other forms of gold include scraps or jewelry.
The main reason that bullion is preferred is because it holds a consistent value, like scrap gold, which is melted all into a consistent bar. Jewelry and other sources of gold may have a value but it all depends on whether other people consider it a nice piece of work.
All but one form of gold IRA needs to be held in a financial institution so that your bank and insurance companies know that your gold is safe. It also ensures that your IRA is not cashed in before you reach retirement age.
There is one type of IRA that doesn’t need to be kept with a financial institution, this type is known as gold eagles. Gold eagles are a coin released by the United States Mint. These coins can be collected at home as part of your gold IRA but the process involves a lot of paperwork and is complicated. There is also a lot of scrutiny from the government on this type of investment as otherwise it would be easy to abuse. Gold IRA accounts can take much longer to setup because in order to get one of these accounts you must start with a checkbook IRA and roll it over into a gold eagle account.
Before deciding whether you want to purchase gold or not you should know that while the price of gold may be constant there will be other fees associated with setting up and managing a gold IRA. First, when it is time to purchase the gold there will more than likely be a seller fee. Looking for the best seller fee is one of the things you should look for in a buyer. Second, there will be an account opening fee. With most banks there will also be account management and storage fees that will be recurring because all but one type of gold needs to be stored by a financial institution.
Gold IRAs are very similar to a traditional IRA except for the fact that they invest in real gold as opposed to an electronic or paper investment. Almost anyone can hold a gold IRA account. To open an account you just need to follow these simple instructions.
1) Find an account manager and go in to fill out an application to open an account.
2) In 1-3 days you should hear back from your new account manager as to whether your account was approved or not. If you do not hear from your account manager after 4 days contact them and inquire about the status of your application.
3) Decide with your account manager where you want to buy your gold from and purchase it.
4) Your account will be there for you as you need it though there may be penalties for early withdrawal (before retirement age specified on account).
You can also rollover part or all of an existing retirement plan. Just tell your account manager this when it comes time to buy the gold. There will be a few other forms to fill out but it isn’t a difficult process. These account types can be rolled over into a gold IRA: 401 (K), 401 (A), 403 (B), 457, thrift savings, and annuities. The biggest fear when it comes to rolling over accounts to a gold IRA is that you will lose your tax deferred status. You don’t need to worry because if your work through qualified metal custodians they will be able to guarantee your tax deferred status on your new account.
Precious metal IRAs can be made in gold but they are also available in a variety of metals. Silver, platinum, and palladium are the other options. Typically gold is the best investment option as it is worth more money per ounce. Platinum is the next runner up then comes palladium followed by silver.
Despite the fact that there is a lot to say about gold IRAs they are a great option that will be secure in a bad economy. Just because they will more than likely be secure in bad times as trends show does not mean they will be at a peak when you need them. It is important to diversify any investments you make, including your retirement account. Gold IRAs also make a great backup retirement account if you don’t want it as your primary account.
The last benefit is probably the best one that you will see. When investing in a gold IRA you will spend less time worrying about retirement. That means that you can live in the now and really live up life. Studies show that those who spend less time worrying also live longer so by securing your retirement plan you could be securing yourself a longer life. If that is true the benefits are possibly endless