When times get tough and investors feel the need to protect their assets, there’s one investment they turn to: gold. Gold has protected investors’ wealth for centuries, acting as a bulwark against rising inflation and economic turmoil. In times like these, with continued economic uncertainty, it’s no surprise that investors continue to seek the safety and security of gold.
Many investors remember the 2008 financial crisis and remember how their investments were negatively affected. Those who had the good fortune to hold gold back then remember how well gold performed during the crisis and its aftermath. And those who didn’t hold gold remember gold’s performance too, with many vowing that they would buy gold to protect themselves against the next crisis.
That next crisis may very well be on our doorsteps right now, and thousands of investors have already prepared themselves by buying gold. That helped push gold to a new all-time high price last year, and a 25% gain in 2020. And with continuing economic uncertainty, gold could continue to climb in 2021.
Those investors who are just beginning to become aware of the role that gold can play in protecting investment assets and retirement savings may not fully understand how they can buy gold bars and coins to safeguard their portfolios. But with a little bit of knowledge, you too can protect your assets with an investment in gold.
Did you know that you can roll over or transfer existing assets from tax-advantaged retirement accounts into an investment in physical gold coins and bars? Did you know that those rollovers and transfers can occur tax-free, allowing you to lock in gains from your existing investments and benefit from future gains in the gold price? And did you know that the process to do that can start with something as simple as a phone call to contact experts who have helped investors just like you protect their assets with gold?
Keep reading to find out how investing in physical gold coins and bars can benefit your retirement savings.
Why Invest in Gold?
If you’re not already familiar with the benefits of investing in gold, here are five of the top reasons to do so.
1. Tangible Asset
Gold is, first and foremost, a tangible asset. Whereas stocks are an investment in a part of a company, and bonds are a promise to pay, gold is something that you can hold in the palm of your hand. That makes it appealing to a great many investors.
Stocks can completely lose their value if companies go out of business. Bonds can become worthless if their issuers default. But gold can’t default or go out of business. It just sits there maintaining its value year in and year out.
2. Compact Store of Wealth
Coins have become a less popular means of payment in recent years due to their bulk in comparison to bills. But when it comes to gold, it can be easier to hold and transport large amounts of wealth with gold coins than with cash.
$50,000 in gold coins can fit in a coin tube in the palm of your hand. It can easily fit into your pocket. The same amount of money would require 500 $100 bills, which would be much bulkier and more difficult to carry around easily.
3. Inflation Hedge
Many investors buy gold to hedge against the possibility of rising inflation. With the Federal Reserve now having committed itself to allowing inflation to rise above its 2% long-term target, there are rising fears that the Fed might miscalculate and allow inflation to spiral out of control. And that has many investors scrambling to buy gold, just in case.
Gold’s ability to maintain its value over time is well known. The purchasing power of an ounce of gold has remained relatively stable over the past century or so, while the purchasing power of the dollar has fallen over 95%. That isn’t likely to change anytime soon, and in fact, gold’s purchasing power might even increase if the dollar weakens much more.
4. Portfolio Diversification
You’ve probably heard about the importance of diversifying your investments, but how well diversified are they really? Too many investors think that investing in a variety of stocks and bonds is enough diversification. But in a systemic financial crisis in which bond and stock markets both sink, holding just those two types of assets doesn’t really protect you.
Proper diversification means really diversifying, investing across asset classes and introducing exposure to real estate, commodities, and of course precious metals like gold. Holding a certain percentage of your portfolio in gold can be just the thing you need to ensure that your investments don’t all plummet when Wall Street’s luck changes.
5. Safe Haven Asset
No discussion of gold would be complete without mentioning its role as a safe haven asset. When markets crash and economies come grinding to a halt, gold asserts itself as the money that most people trust. That’s why central banks continue to hold gold, as they realize that in the event of a breakdown of the monetary system, gold will be a necessary and vital part of any rebuilding.
In crisis after crisis throughout history, gold has played a role in protecting investors and their assets. And it will continue to play that role long after paper currencies have gone by the wayside. Investing in gold as a safe haven asset means that you understand the fragility of the modern financial system and the fact that everything you think you own could disappear in minutes when markets begin to collapse. Owning physical gold coins and bars is one way to protect yourself against that possibility.
Buying Gold Coins
Gold coins have been minted for thousands of years, and have helped fuel international commerce for centuries. Even today, gold coins remain an important product for many government mints throughout the world. But not every gold coin is the right investment for each investor.
Those investors looking to invest in gold through a gold IRA, for instance, will find that they aren’t allowed to invest in gold coins that are considered collectibles. Investors in a gold IRA are also only allowed to invest in coins with a minimum fineness of .995, rendering many classic gold coins ineligible for IRA investing.
Thankfully, there are still dozens, if not hundreds, of IRA-eligible gold coins available on the market today. With so many different producers and designs to choose from, gold IRA investors can have their pick from many high-quality specimens. IRA-eligible gold coins are also available in a variety of different sizes and weights too, with most generally weighing between 1/10 ounce and 1 ounce.
Buying Gold Bars
All of us probably dream of holding a 400-ounce gold bar in our hands. The standard bar of international gold trading, those bars cost hundreds of thousands of dollars, putting them out of the reach of all but the richest investors. But that doesn’t mean that you can’t purchase and invest in gold bars.
Mints and refineries around the world have taken to producing gold bars in sizes that ordinary retail investors can afford to buy. And with their high gold purity, many of these are also IRA-eligible gold bars.
Gold bars catering to retail investors are available in a wide array of sizes too, from tiny 1-gram bars all the way up to 1-kilogram bars (~32 ounces). That gives you as an investor the ability to tailor your gold holdings to achieve maximum flexibility in your gold investments, particularly as you will eventually be required to take a distribution from your gold IRA. With so much variety available on the market, there is a gold bar to serve every investor’s needs.
The Process of Buying Gold Coins and Bars
If you’re looking to buy gold coins and bars, an increasingly popular method of doing so is through a gold IRA. By starting a gold IRA, you can roll over or transfer assets from an existing tax-advantaged retirement account such as a 401(k), 403(b), TSP, IRA, or similar account into an investment in gold. Your gold IRA then enjoys the same tax advantages as your current retirement account, but holds physical gold coins and bars that are stored at a depository. And when you decide to take a distribution of IRA assets, such as a required minimum distribution (RMD) beginning at age 72, you can take your distribution either in gold or in cash.
Opening up a gold IRA isn’t difficult, and all it takes to get started is a call to Goldco to learn more about how gold can help benefit you and your investment aims. With thousands of satisfied customers over the years, the experts at Goldco can help you through the entire process, from the time you decide to invest in gold to the time you purchase and deposit your silver coins and bars.
If you’re looking to protect your retirement savings against loss, hedge against inflation, or build up your wealth in the face of a weakening economy, why wait? Call Goldco today and put yourself on the path to securing your financial future.