Investing for your retirement can be a big headache these days. With an unstable economy, stock market investments and traditional retirement options can be risky.
For those 50 and under, stock market investments may still be an option, but for those over 50, a more secure investment (at least for a portion of your portfolio) is preferable. The answer for many is investing in precious metals.
Why Precious Metals?
While a diverse retirement portfolio is preferable, many workers are investing large portions of their retirement funds in precious metals like gold and silver. When the economy took a nose dive several years ago, “We buy gold!” signs popped up everywhere. There were ads on TV, billboards along the highway, and jewelry stores at the local mall all wanting a piece of the stable gold trade market.
Historically, precious metals have shown a slow but steady increase in value — something that offers a “rock” of stability in uncertain financial times. But investing in precious metals can be disastrous if you’re not careful.
When to Invest in Precious Metals
Anyone can start a precious metals investment plan, but it’s especially important as you near retirement age. To protect their savings from the volatility of the stock market, many individuals choose to roll over their 401K plans into a Gold or Silver IRA five to 10 years before they retire.
Others choose a split plan from the start, with a portion of their investments placed in precious metals. After the stock market crash in 2008, many are leery of losing their investments just before retirement — with little to no time to recover.
How to Choose a Precious Metals Dealer
Scam artists abound anywhere money is to be made, and precious metals investing is no different. You must choose your precious metals dealer wisely.
Here are a few points to consider when choosing a dealer:
1. A precious metals IRA is backed by physical gold or silver. This means that you’ll have to store the metal in a secure location. Keeping your gold locked up in the family safe in the den probably isn’t the best option, so make sure you get details on your storage options before signing on with a dealer.
2. Not all gold is created equal. For investment purposes, you’ll need currency grade gold. The U.S. Mint has put certain standards in place to ensure investment gold is worth the dollars you use to purchase your gold IRA. Currency grade gold must have a fineness of 0.9999 percent in order to be suitable for investment purposes. Anything less can’t be used for investments.
3. Not all gold dealers offer currency grade gold investments. This is where your research, probing, and intuition come into play. You’ll need to throughly investigate and question your gold dealer to make sure you’re not dealing with a scam artist. While normally asking your colleagues for recommendations is enough, that isn’t the case with gold investments. Getting a few referrals from others is a good place to start, but you’ll have to do your own research, go over the fine print repeatedly, and get everything in writing before signing on.
4. Research the track record of any dealer by digging into the public facts about the company, reading reviews online, and asking people in your community about their investment experiences with the company. Check with the Better Business Bureau and your local Chamber of Commerce for complaints filed against a company.
Investing in precious metals is right for those who want a secure investment option and are willing to forego large gains that might be possible with other investment options.
Investing in precious metals won’t provide large profits in a short period, but it will provide a steady ROI over time — and it won’t wipe out your retirement in a volatile economy. It’s a good option for those who want to invest but are conservative or need a secure portfolio.
What advice do you have for those considering investing in precious metals?
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