Why Invest in Gold IRA?

An investor always wonder’s whether he/she has made the right decision. In this article I will analyze the importance of a gold IRA investment and why invest in gold IRA. All financial experts have one basic rule and they always follow it. Never put all eggs in one basket. And a self directed gold IRA is the investment that will definitely ensure your eggs are not all in one basket.

What is Gold IRA Investment

A gold IRA investment is an individual retirement account, an account that functions the same way as a regular IRA account however, instead of holding paper assets, it holds physical bullion coins or bars.

Gold Could Save your IRA

You may regret if you choose a conventional IRA or 401(k) investment with a bank or brokerage firm. The oncoming financial crisis is expected to decimate traditional investment assets. Stocks, bonds, and so on will see their prices drop substantially. That means your, life savings could perish overnight and at the end there won’t be enough savings for you to retire.

Since most IRA accounts are invested in traditional assets, and since all these assets move downwards or upwards together, (correlated assets) there must be another asset that does the opposite.

On the other side gold is a non-correlated asset. (an asset whose value isn’t tied to larger fluctuations in the traditional market) In fact, gold always does well in times of crisis. Call it financial crisis, recession, geopolitical tensions, war, covid-19, trade war, whatever the case is, gold not only maintains its value but it also sees significant gains.

Black Monday1987 Iraq-Kuwait War1990 Dot Com Crash2001 Financial Crisis2008
Stock Market Decline -38.9 -22.5 -27% -34%
Gold Price Results +5% +7.5% +1% +5%
Gold Outperformed Stocks By Ratio 45:1 31:1 29:1 40:1

More Reasons for a Gold IRA

1-Diversification. There is no doubt that IRAs are suited for portfolio diversification in case, economic and world news cause another drop in the stock market.

2-Protects your investment from inflation. Gold is a hedge against inflation. During the years of the highest inflation after world war 2 (1946, 1974, 1975, 1979, 1980) the average real return of the Dow Jones Industrial Average was -13,33% compared to 130,5% for gold. Now in 2020 we expect inflation to come back. The never ending money printing by the Fed and the ECB’s stimulus program will trigger a worldwide interest rates explosion.

3-Gold is a tangible asset. Traditional investing is putting money in the stock market, buying certificates of deposit, or buying bonds. These are not tangible assets. In fact, it could take time for you to convert these investments into cash. For example, if you invest in CDs or bonds you may have to wait for a number of years before you receive a return. If you want to terminate your CDs investment and wish to withdraw early, you might have to pay a penalty. This is not the case with gold or silver as you can convert your coins or bars into cash immediately, as the demand for precious metals is constant.

4-Increasing demand for gold and silver industrial use. Both precious metals have a growing demand for industrial use. In particular, they are used in smartphones, computers, medicine, and nanotechnology. And if we consider the massive precious metals demand for jewelry, only then we get the full picture.

5-Gold is not a claim on someone else’s liability. Gold has never lost its value for mismanagement, corruption, theft, war, etc. Stocks have. Also, there has never been and never be a haircut to gold as its been happening with debts and savings.

6-Geopolitical uncertainty. Geopolitical tensions are growing, the Middle East is still in turmoil. Syria and Iran are under Russian control, with the United States having lost their credibility. Hong Kong tensions never stop, Brexit deal, and North Korea continues to upset with its unruly behavior.

7-The US-China trade war. There is no doubt the trade war between the two superpowers has interrupted the markets and global economy. The uncertainty these actions cause is good news for gold.

8-The weak dollar. Gold moves in the opposite direction of the American dollar and the dollar has never been weaker. The never ending money printing will cause the dollar to continue its downward trend. I am afraid the US dollar will be weak for a long time.

9-The covid-19 caused crisis. The coronavirus has caused an unprecedented financial and economic crisis. The impact of the crisis in global economy is still unknown. However, what we know is that the economic downturn in western economies during the second and the third quarters of the year will be between at least -15%.

A traditional IRA fund consists of traditional assets. But when you open a self-directed IRA, you are empowered to make your future secure after retirement. The experts will help you to make investment decisions and choose a precious metal coin, bullion, and bars to invest in.

Choosing the Right Gold IRA Company

A traditional IRA fund consists of traditional assets. But when you open a self-directed IRA, you are empowered to make your future secure after retirement. The experts will help you to make investment decisions and choose a precious metal coin, bullion, and bars to invest in.

Choosing a gold IRA company could be a headache. A gold IRA company that respects itself and its clients should not take more than seven days to complete processing and shipping. It should also offer segregated gold storage, a low fee policy, and a buyback program.

Remember these people will have to handle your savings, therefore they must have a proven track record, and a reputation to follow.

More Gold IRA Benefits

  • Tax Benefits
  • Flexibility & Freedom
  • Investment Diversification
  • Great Growth Potential
  • Portfolio Protection from Unexpected Events

Final Words

There is no doubt that we are going through uncertain times. There is an unprecedented economic crisis on the way. Businesses are already closing, the stock-market is overvalued and expected to suffer heavy losses, the coronavirus is here to stay and the vaccine will not be available till March or April 2021.

In addition, unemployment is rising and there is social unrest in the community. People are angry because of the economic uncertainty and they do not trust politicians.

A gold IRA is the right investment now. It will ensure that your savings will not perish overnight due to the oncoming crisis.

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