With the tumultuous economic climate we have been in the last few years, many people are confused about where they should invest their retirement funds. Many people have lost faith in the stock market, which is not very friendly to small investors. In addition, interest rates are so extraordinarily low, that yields on bonds and CDs are negligible. Rates are so low that the “return” you will get is likely to be less than the inflation rate, therefore, in reality you will be getting a negative rate of return on your investment. So, where can a person turn in order to safeguard their retirement portfolio?
Precious metals IRA investing could provide you with an answer as a complement to your other investments to protect your wealth and purchasing power. Precious metals consist of gold, silver, and platinum. We will focus most of our attention on gold, but the other two are also viable choices.
Over the past decade or so, gold has gone up more than 400%. There are very few investments you could have made which would give you a better return than gold has over the past ten years. You may be wondering if this trend is likely to continue.
Nobody can predict the future for certain, but there is very compelling evidence that tends to support higher gold prices for years to come. Here’s why:
The two largest currencies in the world the U.S. dollar and the Euro are under assault. Both of these currencies are fiat currencies, meaning they are backed by no tangible assets whatsoever. Since the U.S. dollar is still the world’s reserve currency, we will primarily discuss the dollar, however, many of the problems that plague the dollar are also applicable to the Euro.
It is no secret that the U.S. government has been running up some incredibly large annual deficits of late. That is troubling enough, but the manner in which the U.S. is financing this extraordinary debt is even more troubling. In normal circumstances the U.S. Treasury will finance the nation’s debt by issuing Treasury bonds to investors. These investors are both foreign and domestic, but many of these bonds have been purchased by Chinese, Japanese, and Middle Eastern governments and investors. Lately, the magnitude of the debt that has been issued by the U.S. Treasury has been so large that they cannot find enough investors to buy all their bonds. The U.S. government has “solved” this problem by engaging in what is euphemistically referred to as quantitative easing. With QE the U.S. Treasury issues bonds and the Federal Reserve “purchases” the bonds. This finances the governments enormous debt and injects capital into the economy in order to stimulate it. The problem with this scheme is that the government is effectively just printing up more money. Although, the are not actually printing it, conceptually, this is what they are doing. If you hold your wealth in dollar denominated assets, it is effectively making your investments worth less, because the government is diluting the value of your currency, the dollar.
You can create a hedge against this type of fiscal hanky panky by investing in gold and precious metals IRA investing is a great way to do so. Gold has certainly withstood the test of time, since it has retained its value irregardless of governmental or currency vagaries and vicissitudes. For all of recorded history, gold has been valuable, and it is unlikely that this trend will cease, highly unlikely. Consequently, gold is probably the safest investment you can possibly have. When you invest in gold, you won’t have to closely monitor stock and bond markets in order to determine when you should move or withdraw your capital. You can rest assured that your gold will always have value.
With precious metals IRA investing you will be investing in a physical gold product, not a gold ETF, so you can be assured that your investment will be safe. Normally, you will be able to set up a gold IRA account with one of a number of different companies that buy and sell precious metals. Once you have established your account, the physical gold that you now own will be sent to a company that operates a highly secure gold storage facility. You will have to pay a small fee annually to the company that is storing your gold, but you will own physical gold, which is an investment that has certainly withstood the test of time.
Diversifying an investment portfolio with precious metals for your IRA is something to research thoroughly. I hope you will take the time to get educated like I did. One of the ways in which I learned was to request a free gold investment kit from Regal Assets and I’m so glad I did because that knowledge it gave me made me so much more confident about my investing decisions.
Retirement planning expert and rollover IRA to gold adviser.