The U.S. stock market is on its longest ever bull run. Yet, many fear another recession is on the horizon like we saw after the 2008 crash. Whether you believe the market has steam or may deflate, precious metal will lower risks.
Gold is a common investment recommendation for a diversified portfolio. A gold IRA is a smart choice for those investing long-term for retirement.
In the following sections, you’ll learn the great benefits of gold IRA investing.
What is a Gold IRA?
The Internal Revenue Service (IRS) allows investing in precious metals within retirement accounts. These metals usually include gold, silver, and platinum if they’re 99.9% pure (or better). The accounts include an IRA or 401(k).
There are a few avenues with investing in gold:
- Coins, bullion, and other physical forms
- Through a gold supplier or company
- Via gold ETF and publicly-traded funds
The IRS requires IRA gold investments to be done through a trustee like Goldco. Or, one could invest through ETFs in their traditional or Roth accounts. Both provide the value one expects in holding precious metals.
The Benefits of a Gold-Based IRA
Gold has long since been a way to hoard wealth and pay for goods. At the time of this writing — spring 2019 — gold is shy of $1,300 an ounce.
Let’s now get into the ‘why’ behind adding gold to your retirement portfolio.
1. A Given: Diversification
A diversified portfolio protects your investments from wild market volatility. In downturns, many turn to precious metals, bonds, and other ‘safe’ investments. A gold-backed IRA usually performs opposite of paper assets — offering stability.
2. The Increasing Demand
Gold is more than a precious metal people use to back wealth. Jewelry, electronics, and even dentistry use gold. And, because there is a limited supply, this creates an on-going demand helping raise its value.
3. A Hedge Against Inflation
The limited quantity of gold also creates a hedge for inflation.
Unlike when the Fed decides to print more paper money, gold tends to keep its value. The value correlates with rising interest rates. And, it has a historic positive performance during major downturns and hyper-inflation.
4. Tax Advantaged
Traditional IRAs let investors grow their portfolio through tax-deductible contributions. A Roth IRA is pre-tax, letting you enjoy tax-free income generation. Having gold in the IRA is advantageous for tax advantages.
5. Stability in an Unstable World
Paper assets are at the whim of whatever happens from deregulation to geopolitics. Even if you’re not a doomsday-type, we see unrest every day throughout the world. Gold is a stable investment even when there are worldwide risks of destabilization.
Start Investing for Your Future, Today
We may not see a recession as we did post-2008 anytime soon. On the flip-side, we could see the markets tank tomorrow. That’s the nature of the market.
A gold IRA is an ideal method of diversification to avoid risks of a downturn.
The sooner you begin investing the better as you’ll tap compounding earnings. We recommend getting a start with one of the many financial investing tools. Lock in your investment today to secure your future.