Are you seriously thinking about investing in a gold IRA? You’ve heard that it’s a good idea to help grow your retirement savings. But you aren’t 100% positive it’s the best choice because you haven’t fully investigated this opportunity.
With that said, we implore you to keep reading. Learn the reasons why investing in gold is such a powerful asset to fund a happy life in retirement.
Reason #1: It’s a Great Way to Achieve Portfolio Diversification
Every financial advisor and successful investor say that portfolio diversification is an absolute must. Why are they so adamant about this fact? They’ve lived through the ups and downs of tumultuous markets. They’ve invested heavily in one asset and got burned.
They’ve struggled in one investment after another at different times. And by spreading your risk, you will better achieve financial growth over the long term.
Let’s look at the stock market when compared to the value of gold. During the 2008 market crash, the value of gold rose at a tremendous rate.
In fact, you could’ve pulled all of your money out of the stock market and invested it in gold. In 2009, you could have purchased gold for $700 an ounce and sold it for $1200 an ounce months later.
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This kind of portfolio diversification is an absolute must during times of economic uncertainty. Guess what? We are in a time of massive economic uncertainty right now.
And what do you think happened? You could’ve bought gold for $1200 an ounce at the end of 2019. That investment would be worth $1930 an ounce right now and climbing. Need we say more.
Reason #2: Preserving Your Wealth
The US dollar is certainly valuable, but the economic stimulus is causing it to lose value every day. The Federal Reserve is being forced to print more money to prop up the US economy because of the coronavirus. This doesn’t bode well for the value of the US dollar.
In fact, the more they print US currency, the less valuable it becomes. So, if a loaf of bread costs $3.50 in 2019, the same loaf of bread may cost $5 in 2021.
Gold is a physical asset as you know. No one is ever going to print new gold bars, coins, or rounds. They may pull more gold out of the mines, but even those are beginning to run dry. This makes gold a precious commodity and a very valuable asset.
Investing in a gold IRA is an excellent way to preserve your wealth. By purchasing gold, you don’t have to keep all of your eggs in one basket, meaning the US dollar.
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You can diversify your wealth, spread the risk, and gain additional value all at the same time.
Reason #3: Excellent Liquidity
Did you know that gold has great liquidity? In fact, in Exter’s Pyramid, gold has the best liquidity of all of the assets mentioned.
The pyramid contains the following assets from most liquid to most illiquid. They are:
- Gold
- Paper money
- Government bonds and treasury bills
- Corporate bonds, municipal bonds, securitized debt, and listed stocks
- Nonmonetary commodities, private businesses, and real estate
- Unfunded government liabilities and derivatives
Why is liquidity important as an investor? The more liquid an asset, the easier it is to sell the asset when it’s time to take profits.
If you’re in an illiquid market, you may not be able to find a buyer very easily. And the buyer might not be willing to pay your price for an illiquid asset. You want to own investments in active marketplaces.
That’s precisely what you get when purchasing gold as part of a precious metals IRA.
Reason #4: Gold Possesses Strong Intrinsic Value
When compared to paper currencies, gold is a much more stable and solid asset. As mentioned earlier, the Federal Reserve and other governments can print paper currencies whenever they feel like it.
This doesn’t bode well for the value of the currency over time. The more they print the currency, the less valuable it becomes. This creates inflation and it devalues the currency.
Gold possesses intrinsic value all its own. It’s impossible to manufacture gold and no one is ever going to print it. But it can be mined and this is the only way to bring more gold into the world.
Guess what? Gold mines are drying up. This is an actual fact and the reason why countries like China and Russia are buying up gold in droves. They want to get their hands on this proven commodity and precious asset before it disappears.
Do you know what scarcity means for the price of gold? It means that the value of gold will continue to rise because it’s harder to find. This bodes well for gold investors looking to increase the value of their precious metals IRA portfolio.
Reason #5: Gold IRA Accounts Provide Unique Tax Advantages
Opening an IRA account definitely provides serious tax advantages. By investing in gold through a gold IRA, you’ll experience the following benefits:
- A lower adjusted gross income
- Tax-deferred savings for retirement, depending on how you set up your account
- Tax -free savings for retirement, depending on how you set up your account
- Tax-free or tax-deferred earnings on your investments
- Continued accumulating investments until 70 ½
- Tax-deferred investments are taxed at the marginal tax rate
As you can see, the tax benefits of a gold IRA account are tremendous. They are likely better than your 401(k), 503(b), or other retirement accounts.
Bottom Line
At this point, you should be thrilled at the thought of investing in a gold IRA. The benefits of this investment are outstanding, to say the least. And the tax breaks, the unique intrinsic value, and the scarcity alone make gold a truly valuable commodity.
Do yourself a huge favor and take the plunge today. Contact your favorite gold IRA broker and begin the account creation process sooner rather than later. The faster you open your precious metals IRA account, the quicker you’ll begin making hefty gains for retirement.