A gold IRA can provide a significant opportunity for retirement savers to diversify their retirement investment portfolios. Most retirement investors who have IRAs or 401k/403b accounts have the majority of their retirement savings in stock or mutual funds. While these investment vehicles have a place in any well balanced retirement investment portfolio, recent events have demonstrated that it’s unwise to have an investment portfolio that’s nearly 100-percent dependent upon gains in the stock and bond markets.
Traditionally, bonds have provided portfolio stability, but as we’ve seen in the very recent past, the bond market can be seriously impacted. Heavy investments in poorly rated bonds were in part responsible for the most recent financial meltdown. The stability of the bond market, which at one time had been taken for granted, can no longer be assumed.
Instead, savvy investors must work to protect their retirement savings by diversifying their retirement investments. A gold IRA, also known as a precious metals IRA, can provide exceptional market-independent stability. As an investment, gold is gold. It has no ratings and is subject only to market forces. When uncertainty and instability are high, gold rises in value to balance out other investments that are not as robust. In good times, gold still holds considerable value.
When you create a IRA gold investment, you purchase actual gold – usually in the form of gold bullion or gold coins. The custodian of your self-directed IRA holds this gold in storage. The physical asset is available and reserved for its owner. No certificates, no proxies… just plain gold. The physical gold IRA puts actual assets into your possession.
Although IRS rules allow both tangible and intangible assets to be held in a retirement account, few investors venture off the beaten path. While gains in the stock market can be impressive when the market is good, the losses can be staggering when the market is bad.
Currently, key indicators such as the value of residential and commercial real estate, the growing federal debt and continued weakness in the job market are troubling. Retirement investors who want to protect and preserve their retirement savings should consider a diverse retirement portfolio that can respond to all market conditions and have the ability to offset significant losses in one sector with investment that can gain independent of stock market conditions. A gold IRA investment may be an excellent vehicle to preserve and grow wealth in the coming years.