3 Reasons Why a Gold IRA Is Right for You
While most IRAs allow you to secure your money by investing in traditional assets such as bonds and stocks, there are other “self-directed” options permitted by the tax code that allow investing in precious metals.
The tax code establishes certain regulations and standards that determine the quality and purity of the metal coins or bars that are to be held in an IRA. This is basic information, but the question remains—should you invest in a gold IRA?
Some investors, like Warren Buffet, believe gold is a losing bet as it doesn’t pay any interest or dividend. Others believe that investing in this precious metal is a winning proposition due to certain factors, such as the sharp decline in the value of the US dollar.
Here are 3 compelling reasons why we believe investing in a gold IRA is a better hedge than other precious metals.
Decline in the Purchasing Power of the US Dollar
Although the U.S. dollar is a reserve currency around the globe, people start securing gold as soon as the value of the US dollar weakens. During the US dollar devaluation between 1998 and2012, the price of gold doubled, reaching a whopping $1,800–1,900 per ounce. This shift in investment trends has been well-observed for years, and is likely to recur as the US dollar continues to lose its purchasing power due to inflation and debt.
Gold Safeguards the Stocks You Own
If you want to hedge your stock market investments, gold might just be the right answer for you. Observe the four biggest stock market declines in the table below to get a better idea:
|Biggest stock Market Declines||S&P 500||Gold|
|Sep, 1976 – Mar, 1978||-19.4%||53.8%|
|Mar, 2000 – Oct, 2002||-49.0%||12.4%|
|Oct, 2007 – Mar, 2009||-56.8%||25.5%|
|May, 2011 – Oct, 2011||-19.0%||9.4%|
The trends show that as the S&P continued to decline in these periods, gold continued to increase in value. There can be other factors contributing to the increase in gold prices; however, it’s better to invest in gold to mitigate the risk, in case of a stock market crash.
Gold is Highly Liquid and Portable
Gold is a highly liquid asset that’s easily recognized by all bullion dealers around the globe. You don’t have to go through a whole chain of financial institutions to sell gold; it can be easily sold to verified sellers in case you need to liquidate your assets.
Open a Gold IRA today!
Whether you want to start a gold IRA or roll-over an existing IRA, Orion Metal Exchange will help you out! We’re one of the leading gold IRA companies & custodians. We help our clients set up precious metal IRA accounts and store gold safely. Contact us for more details about our procurement, storage and other services.