Pros and Cons of a Silver IRA
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Before you move on to understanding the benefits and drawbacks of silver IRA, it’s better to understand what the silver IRA is.
It’s a special type of retirement account that enables you to invest your money in silver bars and coins. It’s different from a traditional IRA because it isn’t eligible for silver investment. You can invest and acquire silver and other precious metals through this type of an IRA account.
You might be wondering why you should your savings in a precious metal? From an expert’s point of view, it’s beneficial to diversify your investment portfolio for better risk management. Silver offers a safe and reliable way to secure your savings and promises high returns as well.
However, to protect your retirement funds best, you need to understand the pros and cons of silver IRA first.
Pro: Hedge Against Chaos and Inflation
As is known popularly about all precious metals, silver provides a hedge against inflationary pressures. Inflation can seriously devalue the currency so preserving your cash instead of investing it in silver can depreciate the value of your savings.
Historic evidence shows that the price of silver has only followed an upward trend throughout the past centuries. In the last century, in fact, silver has seen a tenfold increase in returns.
Silver investment preserves the purchasing power of your savings in trying times and offer high returns in a boom.
Pro: Diversification of Your Portfolio
IRAs are usually dependent on paper assets such as stocks and bonds, whose value can fluctuate with the sway of the invisible hand. In comparison, silver assets preserve their integrity and value over time.
A silver investment offers a relief from the volatility of bond prices and stock market crashes. In fact, precious metals remain unaffected in case of a stock market crash!
For the sake of diversifying your portfolio, it serves well to have unrelated assets such as stocks and silver bars. This helps manage your savings better in case the market of one asset undergoes serious changes.
Cons: Restrictions in Silver IRA Custody
Investors who are looking for high returns with low risk find silver investments a plausible opportunity. However, those who wish to physically see and hold the asset they’re investing in, might not like the idea of a silver IRA. The IRA account restricts the keeping of the bars and coins at home or in personal custody.
However, analytically, these restrictions work in your favor because custodians are responsible for purchasing, insuring, transporting and safe-keeping your assets. This saves you from the risk of theft or fraud.
We’ve been in the industry for too long to risk out clients’ trust for anything!