The Benefits Of A Gold IRA Investment

45Investing In Gold

Investing in gold nowadays is considered by many people as being a wise way to make additional money especially with the uncertainty of the economy. Invariably history has shown that when the economy starts to fluctuate with uncertainty gold always tends to rise in price as many shrewd investors go for the safer option. One way of doing this is to open a gold IRA investment plan as a simple and advantageous way to invest in this gold, or other precious metals if you choose to do diversify.

In times of uncertainty all precious metals such as gold, silver and platinum are all very safe bets but gold definitely seems to be the more popular option especially when considering a gold IRA investment.

Gold and silver has also been known as a valuable addition to any investors portfolio searching for diversification and long lasting security. Get ready for huge rises in the price of gold if the economy keeps going the way it does. There has never been a better time to invest in gold, silver and any other precious metal and setting up a gold IRA investment is a great way to do it.

A strong Case For Investing In Gold

Many investors and financial experts provide strong cases why gold could soar over the next few years and some are even saying it could potentially go up to $10,000 an ounce. One thing is for sure it’s definitely set to rise further than what is is at the moment if people keep buying it as demand will set the tone.

Even though the cost of gold can be volatile during the short-term, history has shown that gold has always held its value throughout the long-term, becoming a protection against the erosion of the buying power of paper money. Gold is an important part of a diverse investment portfolio because its cost increases in response to events that erode the value of traditional paper investments like stocks and bonds.

Time To Prepare For A Volatile Future

Now that there are so many people seeking to own this physical precious metal, it only seems sensible that they would want to put it into an IRA to help secure themselves for old age. Lot’s of retirement plans have had some major downfalls in the last few years, but those people who invested wisely in gold are very happy indeed today, especially those who entered into the gold market early enough. That’s not to say that you have missed the boat, on the contrary, things are just starting to heat up. It’s hard to find many comments from any influential business men or financial analysts that are saying now is not the time to invest in gold.

Many people just don’t possess the extra capital required to buy this precious commodity therefore it makes perfect sense to use their retirement money that has already been put away for a rainy day as a great starting block for their gold IRA investment.

Self Directed Gold IRA Investment

One of the best ways to start a gold IRA investment is to roll it over and turn it into what is recognized as a self-directed gold IRA.

You have to do it using this method because your 401k will not permit you to own Physical precious metal, so you hardly have any other choice but to transfer it or do what’s commonly termed as a 401k rollover to the particular IRA that permits you to own physical gold within it.

You also have the option to transfer your current IRA in to a gold IRA, and the beauty of a self-directed gold IRA is that you aren’t restricted to holding only precious metals in that account. In addition to this you get all the great tax benefits that are involved with a gold IRA investment plan.

Advantages Of Adding Gold To A Roth IRA

This is a very good way to get actual physical gold. One of the biggest benefits is that there is absolutely no storage it’s an especially safe and sound way to go about investing in gold without putting any unnecessary risks and worry on yourself. You don’t have to worry about transport and storage as this is all taken care of for you.

Because you make all the decisions in a self directed IRA investment it makes sense for anyone who has already invested to want to do it. By generating a self-directed gold IRA you are able to invest as much gold and silver that you want to manage from start to finish on your own without messing around and depending on the advice of third parties who may not always have your best interest in mind.

Why You Should Invest in Gold Stocks and Watch Gold Prices

44Gold price is a very important economic indicator. Without knowing the current gold price, inflation and deflation can spark worry and nervousness among investors. Find a site that has updated gold prices and I suggest that you familiarize yourself with the site so that you are able to check out the real-time gold prices.

Gold prices dictate economic policy decisions and relates to gold stocks. Production estimates, mineral reserves, and cash costs also feed the changing dynamics of gold stock prices. Interestingly, most people do not take the time to analyze their portfolios. Risk assessment is key and the already mentioned site should have a custom analyzer that can rank you gold stocks.

Gold price is key in that the entire world revolves around currency and would be unable to further itself without a steadfast currency that endures. Gold, Gold, Gold!

I must also add that other economic indicators are of great importance. Information about stocks that relate to the metals and minerals sector is very hard to come by and should not be missed. I would suggest looking into gold stocks for additional information regarding general news stories but would use a single site for all other gold concerns.

Collect And Invest In Gold Coins

Handful of gold coins

With the security that precious metals provide from the recent economic and political instability, most investors understand that it is a wise idea to invest in gold or silver. But many can’t decide what the best way to invest in gold or silver is. The way you choose depends on your reasons for investing in gold, and how much you are looking to spend.

One of the best way for the average person to invest in gold is with gold coins. Gold coins have several benefits over large gold bars. With the exception of the smaller gold bars (say, an ounce or less), gold bars come in large denominations that are somewhat illiquid. For example, if you have a 10 ounce gold bar and you want to sell a half-ounce of it, you can’t slice off a piece of the bar. You have to sell the whole thing. On the other hand, if you have 20 half-ounce coins (or small bars, which are available), you can sell just one coin and keep the rest of your investment intact. This liquidity would also be useful in times of severe crisis. Imagine a time of total war and hyper-inflation. Let’s say you wanted to exchange some gold for an escape option, or for some necessities such as food or clothing. Smaller denominations would be more useful for buying such necessities. Otherwise you could easily be exploited by people who demanded the entire gold bar. Like being stuck with taxi driver who pretends he doesn’t have change for a twenty, you could get taken.

Gold coins are durable and last hundreds of years. Alloys (gold with another metal added) can last for thousands of years. They don’t tarnish and don’t scratch easily. They’re also easily stored because of their small size. Many investors prefer to store their gold coins in their homes, stashed in some secret place, unlikely to ever be found because of their small size. Large gold bullion bars require professional storage and security services, which costs you money. And obviously the reputability of the storage provider needs to be confirmed.

Coins and small bars are also easy to buy, with reputable vendors existing in basically every major city and also online. So how do you choose which gold coins to invest in? There are two things to keep in mind:

1) Some gold coins are pure (999/1000 is considered pure gold, also known as 24 carat gold), but others are only 917/1000 parts gold (aka 22 carat gold). Both are reasonable investments, and as long as the real weight of gold contained is printed on the coin then two one-ounce gold coins will contain the same amount of gold. But pure gold does have slightly higher prestige and may be more easily sellable because they can be melted down easily. In a time of crisis that ability to be melted down may be worth something to someone. I personally prefer the purest gold I can find because I just find it aesthetically more pleasing, and more impressive to imagine its contents. And if you are going to invest in gold coins you should enjoy it!

Some popular coins of 917/1000 purity are:

The US American Eagle

The South African Krugerand

The British Sovereign

Some popular coins of 999/1000 purity are:

Canadian Maple Leaf coins

Australian Kangaroos

The Chinese Panda

(Nice stereotypical names, I know!)

2) Some coins, particularly older coins and rare coins, have “numismatic value”, or additional value due to collector’s prestige. While these can be just as good investments as any because their prestige is unlikely to decrease, their value doesn’t depend only upon the official gold spot prices. If your motivation for buying gold is not as a hobbyist but rather as an investor, it may make more sense to buy a common coin whose value is based strictly on the official gold spot prices (plus a markup/commission, generally ranging from 1% to 5%).

One downside to buying coins or small gold bars rather than large denomination gold bars is that the markup on gold is often higher the smaller the amount you buy. Buying one ounce of gold may cost you 5% more per ounce than buying 5 ounces of gold. With the current gold prices per ounce hovering around $900, that means you could pay $45 extra if you only buy a single one ounce coin. Also remember that, as with large denomination gold bars, there is a bid/ask spread. That means that the price you buy the gold at will be different from the price you can sell the gold back at on any given day. The buy price is typically 3% higher than the sell price. So you can see that buying and selling coins quickly to make quick profits is not a very enticing option. It’s a much wiser idea to buy gold with the intention of holding it for security, wealth preservation, longterm investment, and enjoyment. And with such reasonable goals in mind, gold coins are one of the best ways to invest in gold.

Smart Investing For Retirement

42The Tax Payer Relief Act, adopted in 1997, has made precious metal investment possible into Individual Retirement Accounts (IRA’s). Accepted metals are now silver, gold, platinum and even palladium, though the most popular kind of investment is in gold. There are many reasons why a gold IRA account is a wise choice for the future.

Money, as it is recognized by the world, consists of pieces of paper or coins. The total amount of money released on the market by a government must not exceed their value in gold. Even if countries can print the amount of money they are willing to, the amount of gold in the globe varies only slightly, as resources are limited. When a currency loses its value, or when stocks decrease in value, the price of gold rises.

This is why many individuals decide to invest in gold when it comes to their individual retirement accounts. It is important to have financial stability once you no longer need to work, so a proper balance between your retirement funds, properties and other valuable assets must be accomplished by then.

There are a few simple steps needed in order to invest in a gold IRA Account, as detailed below:

IRA Account Type

The first thing you need to determine is what type of IRA you have. Even if there is the possibility to make changes, some accounts are not compatible with precious metal investing. Still, the traditional, roth, Simplified Employee Pension (SEP) and Simplified Incentive Match Plans For Employees (SIMPLE) IRA accounts have the option of gold investing.

Finding the Right Custodian

This step is important, because even if there are many expert custodians available, not all of them understand the importance and the implications of gold investing. Look for a custodian with experience in precious metal investment and choose based on recommendations, credentials and expertise.

Funding Your Account

Funding an IRA account with the purpose of gold investment can be done by a simple transfer from your current account or even from a 401(k) or a company retirement account. A certified custodian will be able to guide you through the entire process, without hassle.

Decide What You Want To Buy

Investing in gold doesn’t necessarily mean buying gold. Another option is to buy gold mining stocks, so discuss it with your custodian and follow their advice, as they will understand the market better.

Keeping Your Gold Safe

This is the most important part when choosing to invest in gold. It is mandatory to open an account with an IRS-accredited depository in order to keep your gold IRA investment. Personal handling and keeping the gold is prohibited by the IRS, as you are not able to provide insurance in case anything should happen. Also remember that not every piece of gold is in compliance with IRA accounts. The safest method is to invest in gold and silver bullion that has 99.9 percent purity, or coins like the Canadian Gold Maple Leafs, the Austrian Philharmonics, the Australian Kangaroo Nuggets and the American Gold, Silver and Platinum Eagles.

Balance

Even if investing in a Gold IRA Account is advisable, a balance between money and precious metals must be kept at all times. The economy sometimes evolves unpredictably, so having multiple options when you retire is advisable. A balance of between 10-20 percent is often recommended by most custodians and gold market advisers, keeping in mind that trade has always been – and will remain – the most profitable source of commerce.

Easy Way to Invest in Gold

41The gold is held in many forms like jewellery, bars, biscuits, coins, etc. and it is passed on from one generation to another as family heirloom.

Safety, security and quality of physical gold has always been an area of concern.The gold Exchanges Traded Funds (ETFs) have made investment in gold very convenient and smooth. The gold ETFs are popular in various countries since long but it made its debut in Indian markets in the 1st decade of the 21st century. The concept of gold ETFs is that money collected from the investors is used by the fund house to buy the physical gold and the same is stored with a custodian. The fund houses however keep some amount collected from investors in Bank or short term instruments mainly to take care of the expenses. Normally, one unit of ETF is equal to one gram of gold but it is not necessary in all cases.

The gold ETF units are listed on the stock exchanges and traded on regular basis. The unit price move with the movement in the price of physical gold since these are backed by physical gold. However, it is noticed that price of one unit of gold ETF (where it is based on one gram of gold) is slightly lower than the price of one gram of physical gold. The main reason behind this gap is that fund house has to incur expenses like custody fees for storage and security of physical gold, management fee, etc. These expenses are met out of the total corpus of the fund. These expenses are around 1-1.5% of the total corpus size. These expenses actually creates a gap between the prices of gold ETFs and Physical gold over a period of time.The ETF having lowest expense ratio are considered as best bet for the investors.

The gold ETFs are available in fungible form and credited to the demat account of the investor. Few advantages of gold ETFs are as under:

1. No hassles of safety, security or storage like physical gold. You save on locker rent and insurance cost.
2. Very liquid – You can sell ETFs on any working day and get your money on third day of the trade.
3. Investment equivalent to the price of half or one gram of gold is possible.
4. No concerns of purity/quality.
5. No making charges or VAT but brokerage is chargeable at the time of buying and selling of ETFs.
6. ETFs are easy to buy and sell – You can buy and sell online or over telephone through your stock broker.
7. Unlike physical gold, no wealth tax is applicable in case of gold ETFs.

These factors make gold ETFs very convenient instrument for investment in gold. Gold ETFs should therefore be in the portfolio of every investor. ETFs also act as hedging tools against increase in the price of gold. Every Indian household requires gold at the time of marriage of their children and near and dear ones. If a person systematically invests in gold ETFs regularly keeping in mind his needs of physical gold at specific occasions he/she can easily build up the required quantity over a period of time. Whenever the actual requirement of gold arises, he/she can sell the ETF units and buy physical gold from the market in the form of jewellery, bars, coins, etc. without worrying about the high prevailing prices of gold at that point in time.