So you have decided to take your hard earned savings and invest it in gold. Great choice! Millions of American’s have picked up on this newly popularized investing trend that a few years ago was only an investment considered for the moderate to very wealthy. Luckily for the rest of us middle class American’s, the stigma around this investment is gone.
The main difference between a Traditional and Self-Directed 401K is this:
In a Traditional 401K account, your investor choices are limited and controlled by your employer. These choices are usually fairly inflexible and limited. In a Self-Directed 401K plan, you work closely with an IRA Custodian who helps you understand and navigate in the wide world of investment firms, companies, stocks, and mutual funds to find the best fit for your gold investment needs.
So here are 5 trusted ways to work with your savings and invest in gold:
1. Gold Mutual Funds: This option is the actual exchange of assets for physical holdings of gold. So asking questions like the karat grade of the gold, investments in gold mining companies, and investment management fees for each gold retailer is important.
2. Exchange Traded Funds (ETF’s): this is where you invest your savings into gold shares of a company’s assets backed by gold. You are buying shares of the value of the company’s holdings in gold. This varies with the price of gold, product return, and the company’s value backed by gold.
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With ETF’s you want to understand that because these accounts are not actively managed like stocks and don’t fluctuate like in a busy market, you have slightly less control over your investment.
3. Gold Mining Stocks: This investment option is taking your valuable savings, working with an investment expert to find the right gold mining company, and using your 401K plan to invest in a company. Because this is a more personal choice, you want to choose a mining company with sound values and moral obligation to use your savings in a way that will make your investment grow.
4. Gold Coins: This is not your grandfather’s memory box full of coins from the good old days. These gold coins can be worth a lot of money when bought, traded or exchanged and can provide wonderful returns on your 401K investment. These precious coins can be bought from precious metal firms or coin dealers and held in a safety deposit box. To find a list of dealers you can visit the US Mint website. Popular and valuable coins include Krugerrands, Canadian Maples, and American Eagles.
5. Gold Jewelry: Did you know you already had investments in your jewelry box? Gold jewelry is one of the most popular methods of investing in gold. You might not be withdrawing from your 401K to get involved in this method of investing but there are some basic industry concepts you should know first. Be sure to pay attention to the parts of gold versus parts of other metals, also known as the karat of gold. The higher the ratio of gold the higher the value. Also be sure to get a certificate of authenticity from the retailer.