A Few Tips to Help You Start Investing in Gold

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Everyone is feeling the pain of inflation. It’s hitting us hard in the pocketbook. And although the definition of recession has been put into question, it seems as if more analysts are coming to a consensus that the worst of the economy has yet to emerge.

Naturally, American households are worried about their financial future. The specter of 2008 isn’t all that far behind. And even if we’re dealing with a different set of circumstances, the fear of depleting wealth and a crashing economy still remains. And like many situations in which economic uncertainty has prevailed, the flight to gold to protect wealth is increasing once again.

One way in which people have begun gaining gold exposure is through a gold IRA. Maybe you didn’t know that you can invest in physical gold using a tax shelter. If not, we’re going to talk all about it. We’ll also show you how to invest in a gold IRA in five easy steps.

1. Make Sure a Gold IRA is Right for You

A gold IRA is like any other IRA except that it holds physical gold coins and bars instead of paper assets. But, why hold gold as part of your retirement savings?

It gives you an additional source of diversification. You may already have a well-diversified portfolio of equities and debt securities. But when the market goes south in a way that signals a recession, all “paper” assets, no matter how diversified, tend to move in the same direction: downward. Adding gold to your portfolio can level up your diversification. And in a bear market or recession, holding assets that “march to the beat of a different drum” is probably something you’d want to see.

It gives you protection against inflation. If gold is an inflation hedge, then why hasn’t it risen alongside inflation? That’s a valid question. If you take a look at the history of gold’s rise in relation to inflation, you’ll find that it often advances not with inflation per se but when people begin harboring doubts about the Federal Reserve’s capacity to keep inflation under control.  The bottom line is that the US dollar has lost 97 percent of its value since 1913, whereas gold has gained over 8,000 percent in the same period. If that isn’t “proof in the pudding,” then what is?

It provides a tax-advantaged way to seek growth and safety.

A traditional gold IRA allows you to benefit from gold’s purchasing power protection and price appreciation without having to pay taxes until you begin taking distributions. If you decide on a Roth gold IRA, you pay taxes upfront so that your distributions post-retirement are tax-free.

It provides wealth protection in addition to portfolio diversification.

Remember that gold isn’t just an asset for times of economic uncertainty. It’s a monetary asset that works well during both good and bad times. Since 2000, the S&P 500 has risen 157 percent. Gold, on the other hand, has risen 491 percent. For investors seeking a diversified portfolio, there’s an arguable case that holding both asset classes would have been more favorable than holding just one.

2. Find a Reliable Gold IRA Professional

It’s sad to say, but gold remains a “barbarous relic” unless you’re a central banker or financial institution responsible for managing your country’s currency and economy. In other words, you’ll find that most financial institutions don’t consider gold to be the domain of the “little investor.” Why this is the case is beyond me, but it’s evident throughout mainstream financial media.

With that said, you won’t find many custodians who even know that there’s such a thing as a gold IRA. Obviously, you will want to work with an IRS-approved custodian who specializes in this area. Start by checking gold IRA reviews. Among the top institutions providing this is GSI Exchange. Call us if you need help. We’ve helped thousands of satisfied clients open gold IRAs. We’d be happy to do the same for you.

Once your IRA is open, you will need to store your gold assets at a bullion depository. We work only with depositories that have plenty of experience storing precious metals. So, if you need help, give us a call.

3. Fund Your Gold IRA

Your gold IRA contribution limits are the same as any other IRA. Be sure you know what those are prior to funding your account. However, these limits don’t apply to rollovers or transfers from another tax-advantaged retirement account. In case you’re unfamiliar with either one, a rollover consists of funds moved from an existing 401(k) or similar employee-sponsored account into an IRA. A transfer refers to funds moved from one IRA to another IRA.

4. Purchase Physical Gold

Note that not all gold and silver coins are IRA-eligible according to the US tax code. Among the ones that are eligible are Gold American Eagle coins and Silver American Eagle coins. This is where it helps to consult a professional precious metals dealer with a strong reputation for trustworthiness and customer satisfaction. The quality of the coins or bars you purchase is critical to your portfolio. And this makes working with a dealer that is both trusted and knowledgeable even more important.

5. Stay On Top of Economic Developments

Like any other investment portfolio, there may be times when you may need to rebalance your precious metals allocations: buying more silver than gold, or adding more to your monetary metals than equities, and vice versa. Actively staying on top of economic developments is one way to optimize the value of all your retirement savings, from monetary metals to equities and real estate.

This is why we at GSI Exchange are constantly publishing educational materials and curating economic news articles. As a dealer with a long history of customer satisfaction and product quality, we work hard to actively maintain a beneficial relationship with our customers by helping them see the economic environment ahead and giving them a heads-up when opportunities and risks arise.

GSI Exchange is one of the few dealers of Gold Standard coins in the United States and currently offers clients a way to set up a Gold Standard IRA. For more information on this GSI Exclusive Gold Standard Coin from the UK Royal Mint, visit us at gsiexchange.com/gold-standard-ira/ or call 833-GSI-GOLD.

GSI Exchange is a retail gold and silver dealer in Palm Beach Gardens, Florida, and doesn’t provide tax, legal, or investment advice. When making an investment decision, please consult your tax attorney or financial professional.

By Anthony Allen Anderson, Managing Member

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