Why Precious Metal Investment Is Golden for Your IRA
Benefitting from tax savings of IRAs and investing in precious metal is an excellent combination for your retirement investments. Unlike stocks and cash, precious metals are finite resources that are not controlled by any financial institution or government.
Currencies lose its value; stocks have their value tied to the performance of a certain company. This makes them somewhat risky assets to invest in. It’s important to diversify your portfolio with precious metals that have their own intrinsic value.
Precious metals such as gold, silver, platinum and palladium are finite in supply, but are in continuous demand by private investors, industries, central banks and governments.
They are widely used by various industries for electronic, medical and decoration purposes. However, due to the scarce availability of precious metals, their prices keep rising. According to an article by Goldman Sachs, only 20 years of gold reserves are left in the world, making gold a very profitable asset to invest in now more than ever.
Protect Against Inflation
During inflation, precious metals protect your purchasing power. As precious metals have intrinsic value, they don’t derive their value from another asset. This makes them a safe option to invest in, especially for protection against inflation, when the currency loses its value.
In 1933, the value of gold was $35 per ounce. For this value, you could buy a suit, dress shirt and a tie. Now the same quantity of gold is priced over $1000, and you can still buy a suit, tie, dress shirt and even a few more items with it. That’s how precious metals protect your purchasing power against inflation.
If you’re a risk-averse investor, diversifying your portfolio is a wise strategy. It’s never a good idea to put all your eggs in one basket. Stocks and cash can be very risky, as both assets are very volatile.
The financial crisis of 2008 had such a huge impact on families that many have still not recovered from it. Many individuals were forced to work past their retirement age as the value of their portfolios crashed.
If they had invested a fraction of their portfolio in precious assets, it would have protected them from the devastating effects of recession.
Diversifying your portfolio by investing in precious metals can help secure your retirement by protecting you from unpredictable nosedives in the economy.
Orion Metal Exchange, located in Los Angeles, offers bullions and coin in both gold and silver. Contact us at 1.800.559.0088 for advice and recommendations from our experts.