In the complex Gold IRA market, finding specific, helpful and correct information can be difficult.
Our goal is to educate you on EXACTLY how to put gold into a retirement account, and to explain the pros and cons. We also share the results of our research on several of the leading gold companies online.
However, with so many companies offering similar services, and your retirement on the line, it is crucial not to base your decision solely on 3rd party reviews.
OUR ADVICE: Read Our Reviews, and Speak to Several Companies by Phone – Get a Feel for Them and How They Conduct Business.
PLEASE NOTE: We recommend avoiding companies that sell numismatic or collector coins, unless you are VERY educated and understand the risks. Several numismatic sellers are currently under government investigation for fraud, and some have been closed down, with others to soon follow. If you ever feel pressured by a salesperson, especially regarding “limited edition” coins or “proofs”, our advice is to hang up the phone immediately. You might be interested in reading something more about the International Monetary Fund.
What is a Gold IRA?
A gold IRA and its conventional counterparts are identical in basic structure, purpose, and investment logistical aspects. Investors can make regular tax-deferred financial contributions to grow their retirement savings to the fullest and fastest extent possible. Permissible funds usage and withdrawals are restricted. Any deviation from applicable legal regulations invites severe economic ramifications.
U.S. residents can opt to place gold into an Individual Retirement Account, or rollover a 401k.
Allowable account content is the primary distinguishing characteristic of a gold IRA. In practical terms, this means that all investments are limited to the asset category that its title denotes. Unlike most other IRAs, you must stick to gold products picks for all gold IRA investments. At first blush, this may appear very disadvantageous. After all, diversity is the highly touted catchphrase and crucial element of sustained investment profitability. In the case of gold, however, nothing could be further from the truth. The following discussion clearly illustrates why gold is a major exception to this investment rule.
Does a Gold IRA Offer the Greatest Potential Profits?
Take a moment to stop and think about it. What is the fundamental motivation for any type of investment? Profit, of course! Thus, boosting the bottom line of your retirement savings account must remain the sole overriding objective at all times for all investments. Gold is the one commodity that has consistently withstood Father Time’s lengthy rigorous tests and whimsical winds. Indeed, Father Time himself has repeatedly told the tale of the remarkable resilience of gold. His wise words are there for the viewing of any historical performance graph or chart. Let’s quickly review a few excerpts from this long-running saga right now.
Gold Return vs. the Stock Market
“Where should I invest my money for maximum ROI?”
Novice and seasoned investors alike frequently ponder this question, as the choices can be mind-boggling. Numbers speak for themselves…
Scenario: A $10,000 investment in gold and stocks
Had you invested $10,000 in gold … in 2001, it would have grown to $62,484 by 12/31/12 – a 524% percent increase.
An identical $10,000 stock investment in the S & P index would have gained $2,294. a 22.9% gain.
But gold shouldn’t be looked at as strictly a vehicle for profit…
Putting Gold Into a Retirement Account, or Opting for a 401k Rollover Can be Considered a Strong “Hedge”
In 2008, when the U.S. economy went belly-up for all intents and purposes, many individuals and families lost a huge chunk of their retirement (if not all of it). And it happened quickly. Meanwhile, folks who had even 10-30% of their 401k or retirement account in gold, found themselves protected. Of course, some made huge gains too, depending on what percentage of their funds were invested in gold.
But the key here is that gold can be used as a smart hedge against stock market failure. A safeguard if you will.
World Gold Council:
A recent report of the World Gold Council, a gold industry market developer based on TRUE MARKET INSIGHT, indicates that 2013 was the 4th consecutive year of increased demand:
Gold demand of 3,756.1 tonnes in 2013 was worth US $170.4 billion. Consumers generated exceptional levels of demand, with jewelry at its highest since the onset of the financial crisis in 2008. Central banks made healthy purchases of 368.6 tonnes, the fourth consecutive year of positive demand.
Turkey set the tone as the country with the largest increase in demand – 116%.
Gold Investing Report from Investopedia:
“U.S. inflation was highest in the following five years: 1946, 1974, 1975, 1979 and 1980. During those five years, the real return on the Dow Jones Industrial Average was -12.33%, COMPARED TO 130.4% FOR GOLD.”
Numbers never lie; neither does Father Time. Throughout the ages, their stories have consistently remained identical in every respect: Gold outperforms paper in the long-term.
Additional Advantageous Aspects of Gold IRA Investments
A gold IRA is classified as a “self-directed” retirement savings plan. As the label suggests, investors have the full and final say about when, where, and how to invest their hard-earned funds. Thus, you may freely adjust your market strategies to conform to whatever conditions may prevail. By stark contrast, most conventional IRAs are managed by distant disinterested third parties with little motivation to make necessary tweaks, shifts, and fine-tuning to maintain optimal performance of YOUR retirement investment account.
One can readily discern that metal is much sturdier than mere paper. This relative physical strength differential also remains a constant in fiscal contexts. In fact, the current existence of over 95 percent of all gold ever mined since the beginning of time is powerful testimony of its uncanny durability.
While gold has been the foundation of national currencies for several millennia, paper-based negotiable instruments were born just a few centuries ago. This extreme age difference has definite investment implications, such as:
Believe it or not, gold has many faces that appear in many shapes and forms. Besides its well-known bullion, coinage, and bar personas, gold hides inside a wide variety of items and instrumentalities of little-known association. Its widespread integration into chemical, electronic, beverage, food, and even medical supply products virtually guarantee a perpetually high demand for this scarce metallic substance over the long-haul. As always, of course, the Law of Supply and Demand dictates a single long-term direction for its value: up.
No paper-based “asset” category can credibly boast the same, however. Stock, bond, and mutual fund certificates are subject to mass duplication that affects equally swift massive value declines. Moreover, have you ever heard of paper being part of a lifesaving heart pacemaker? How long do you think paper would last inside a calculator, PDA, GPS system, cell phone, or TV? Do you have difficulty envisioning a stock certificate as an indispensable component of computer microprocessors, industrial machinery, or tooth fillings? Gold has proven superior to all these tasks, however.
Gold IRA Investments: Inflation-Proof?
A famous Shakespearean quote quips, “The best-laid plans of mice and men often go awry.” This age-old social observation is also quite accurate in the context of modern situations. Whether or not you realize it, an invisible enemy constantly lurks about and lies in wait to deflate the value of even the most well made investment portfolios. “Inflation” is its name. This particular foe is no imminent or physical threat to your personal safety. Rather, Inflation is a patient fiend that takes decades to do devastating damage to your pecuniary health. The following example provides clear and convincing evidence of Inflation’s modus operandi:
In 1913, the average price for a loaf of bread was 6 cents. Nearly a century later in 2008, a loaf of bread set the average grocery shopper back $1.37. These figures reflect a whopping 2,246 percent price increase.
Inflation was the culprit all along. In actuality, bread had no more intrinsic value in 2008 than it did 9 decades earlier. Nor did any significant change in bread supply or demand occur. Neither was any legislative act to blame by any means.
Although its nominal price took a major hike, the real price of bread stayed the same from 1913 to 2008. What really happened is that the value of the currency used to buy the bread took a gradual but major dive. Thus, more devalued money become required to acquire the same a loaf of bread. Inflation’s dirty work is not limited to bread, however. It affects all product and commodity categories. Unfortunately, the budgetary havoc wreaked by inflation is unavoidable.
Fortunately, however, a very effective weapon exists to defeat this continued problem; gold. During the same 1913-to-2008 time frame, the price of gold rose from $18.92 to $871.96 — an incredible increase of 4,500 percent that reflects a whopping 46-fold rise. This figure is more than double the relatively puny price hike of bread. In practical terms, this means that 1913 grocers would have been best advised to accept gold coins for bread. While the miniscule 6-cent payment they took instead is practically worthless today, the current value of a tiny gold coin that is thousands of times higher buys much more than one loaf of bread.
The foregoing illustration should evoke a major altered perception to put Inflation in its proper place – in the distant background of the Big Picture of Gold Investment Performance.
Perpetual Political Neutrality
Non-partisanship is another hugely advantageous gold attribute. Unlike voters, gold is impervious to the ever-changing climate of politics and hollow promises of hopeful public office holders. Whenever things start looking a little rough in the rough and tumble business world, investors make a mass stock market exodus. This frequently starts a self-sustaining cycle of capital deficiencies in research and development realms.
Such stagnation of empirical investigation into potential innovations that could save the day for struggling corporations has worse implications for the value of paper stocks on which they are built. This in turn leads to even greater investor hesitation to touch such marginal firms with a ten-foot pole. Much like the famous Energizer Bunny, this vicious cycle keeps going and going and going….
That is, until the whole house of cards inevitably collapses like it did back in 1929. Or even 2008. Such bleak circumstances are very good news for gold investors, though. This is due to the predictable imminent bum rush of their preferred market by timid speculators seeking shelter from merciless stock market storms. As usual, the Law of Supply and Demand immediately dictates an instant incredible rise in the value of their gold IRA investments.
Federal Reserve’s Financial Role
Likewise, when the U.S. Federal Reserve Board announces its intention to raise interest rates a tad or two, it incites terror in the hearts of paper investors. Why? Because they realize the repercussions of such an official move on private monetary markets. Unemployment will soon begin to grow by leaps and bounds. Meanwhile, consumers will postpone major purchases until a much later date because of financial infeasibility, due to higher interest rates. These concurrent circumstances combine to create a very depressing picture for prevailing economic conditions. The dismal portrait features currency deflation, widespread business bankruptcies, and so on. For all they know, the devastating trickle down effects could cause permanent closure of the companies in which they currently hold a significant share of “prime” stock.
Gold investors & owners never worry about such things, because a combination of fixed supply and widespread applications make their precious metallic investments permanently immune to such monetary market “monkey wrenches.”
Federal Reserve: Does it Favor Gold Investors?
In fact, recent Federal Reserve announcements are tantamount to an engraved invitation and golden opportunity to get in on the ground floor of steadily rising gold price levels.
Recently, Federal Reserve Chairman Ben Bernanke publicly pledged to acquire paper-based mortgage-backed securities at a phenomenal monthly rate of $40,000,000,000 USD. In that same announcement, Mr. Bernanke made the stunning revelation that he does not intend to raise interest rates for at least two more years. Known variously as “Operation Twist” and “QE3,” Bernanke’s plan is predicted to have a major positive impact on gold prices.
In 2010, Bernanke launched a bond-buying blitz at the rate of $75,000,000,000 per month, that lasted for several months. The total cost of his fateful shopping spree that is now known as “QE2″ was roughly $600,000,000. Just before Bernanke’s last public disclosure of similar intentions, gold was trading for $1,355 per oz. By the time he finished his mega bond acquisition campaign, the per-ounce price of gold was an even $1,500. This change translates to an 18-percent annual rate of return.
Savvy investors realize that whenever free-floating capital bulges the public purse, it always overflows into the mainstream economy, enabling this enormous short-term profit. What’s so bad about that? High inflation is the big bugaboo and nasty by-product of this otherwise nice situation. And, as previously explained, whenever inflation looms larger than normal, the value of the dollar fades in equal measure. Of course, this in turn drives folks to seek safe harbor in an age-old inflationary hedge called Gold. As the Law of Supply and Demand always prevails within any money market, the dramatic rise in demand created by these paper investment refugees is sure to incite a correlating gold price hike.
When massive gold speculators and battle-weary stock buyers begin gobbling up a finite supply gold bars and coins hand over fist, the whole fiasco has only one possible financial outcome: increased gold value.
Clear Conclusions and Obvious Observations
As it goes, it looks like we’re in for an imminent replay of QE2 and even QE3 / Operation Twist. It’s title is “QE4″ and it’s coming very soon to a money market near you. Fortunately, however, you have a major advantage over your 2008 / 2010 / 2012 predecessors called “hindsight.” Rather than waiting for the show to commence and watching the action from the sidelines, you have a readily available preview of what lies in store. And all characters and plots are the same in the upcoming episode.
Therefore, another surge in gold prices is the logical conclusion to Bernanke’s next speculative venture. Since you know the full scoop from start to finish, far ahead of time, you can act accordingly.
Will more investors end their love affair with paper investments? We strongly believe they will.
And for those who aren’t quite willing to make a drastic switch to gold, there is still the option of considering a modest 10%-30% hedge in gold. Meaning, keep 70-90% of your money in paper – as your financial adviser wants you to.
The folks who placed even a small fraction of their retirement into gold prior to 2008, came out the other side sitting pretty. And those who had the foresight a decade ago are still up 600%.
We encourage you to compare the above gold investing companies on your own. We have provided our reviews as a basis, to help you make an informed decision. We have concluded that Regal Assets shows a distinct lead when closely compared to the others. They are experts in crafting the right approach for each of their individual customers, and they have the best reviews by a large margin.