Should I Invest in Gold?

With the US and global economy on the brink of major change more people are considering an investment in precious metals to protect and preserve their wealth. Do you ask, “Should I invest in gold?” For many, the answer is a resounding Yes. A self-directed gold IRA is the preferred investment vehicle.

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A Case For Investing in Gold

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Gold is an important asset, yet many people don’t appreciate the importance of precious metals for creating a healthy and robust investment account or retirement plan. You want to have investments that can withstand market pullbacks and corrections. Precious metals provide a wealth preservation strength to your accounts.

Gold is money, acting as a medium of exchange and a store of value. Currencies such as the US Dollar rise and fall, but gold and silver have been money for thousands of years. They serve as a store of wealth.

While a currency such as the US Dollar might fail, gold and silver continue year after year, decade after decade, as true money and stores of wealth. Paper currency such as the US Dollar can be printed and inflated into oblivion as shown by this chart from the Federal Reserve. Gold and Silver are rare and limited monetary metals that act as a store of wealth. All fiat currencies have failed over time, but gold and silver have maintained their roles as stores of wealth through the most turbulent of times.

A holding of physical gold or other precious metals is viewed by many as wealth insurance. Some refer to a self-directed gold IRA as “central bank insurance”, protecting a retirement account from the uncertainties of recent central bank activities. Quantitative Easing and other currency printing exercises are unproven and very risky. Protecting your wealth over the long-term is important. A self-directed Gold IRA is one way to do that.

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Gold and Currency

The global economy has become more interconnected over the past few decades. Many of the major nations are economically interdependent. The US receives a tremendous amount of manufactured goods from China, and China very much depends upon those exports to grow and maintain their economy. As global economic imbalances adversely affect one nation other major nations are affected too.

Today there is too much debt around the world. There is more debt than can be repaid. When the debt bubble bursts an enormous global economic decline can follow. This will have a negative affect on most everyone: sophisticated and ordinary investors alike. But people who have prepared for this will be better off.

When economic troubles occur, such as deflation caused by a debt bubble bursting, many central banks will react by printing more currency. In the US this certainly occurred in response to the 2008 financial panic. The Federal Reserve has been printing money wildly in an effort to offset the deflationary effects of the 2008 financial crisis.

When the supply of a currency increases, outpacing growth in the economy as measured by the GDP, the real value of the currency tends to decrease. The currency loses purchasing power, buying less and less in real terms, as more currency chases fewer goods and services. If a large percentage of your long-term investments are tied to a fiat currency such as the US Dollar, your real financial wealth will decline from the effects of high inflation or a currency crisis.

Unlike paper currency, gold offers a way to protect your wealth over the long-term. In a free market, when the value of a currency declines, the value of precious metals typically goes up. An investment in gold and silver could help you offset the losses you may otherwise suffer during high inflationary periods or periods of economic crisis.

Numerous financial experts believe that in a worst case scenario, should a global economic crisis or financial collapse occur, the value of precious metals will skyrocket. Although that is a difficult scenario to consider, it has happened many times before around the globe, in country after country. Investing in precious metals could protect your wealth over periods of a currency crisis or a global financial system reset.

Portfolio Diversification

To protect the real value of your investment and retirement accounts, a precious metals investment allows you to diversify your portfolio and hedge against a currency crisis or global financial crisis. Global financial crisis occur every 30 to 50 years.  We are due for one now.

Regardless of the level of expertise, many investors know how important it is to create a diverse investment portfolio. That diversification enables your investment portfolio to make it through financial storms. Storm clouds are on the horizon now.  The financial crisis that began in 2008 is not over, it has been pushed sideways in time, but the imbalances are still there.

Even with an understanding of the importance of diversification in a financial portfolio, a surprising number of investors mostly invest in bonds and stocks alone. When economic declines take place, bonds and stock can be negatively affected along with the value of the dollar. That can reduce the value of many investment portfolios that are not properly diversified. Perhaps dramatically. By placing a meaningful quantity of physically owned gold or silver in your personal portfolio, you can protect yourself from the negative impact of such an event. Setting-up a self-directed Gold IRA is the way to protect your wealth.

Diversifying your portfolio with physically held gold, silver and other precious metals could help you preserve your wealth through most any financial storm on the horizon.

Demand and Supply

In contrast to paper currency, precious metals such as silver and gold cannot be printed by a government and flooded into the market. Gold and silver are produced through the hard, slow work of mining and refining.  Gold and other precious metals are time consuming and difficult to produce. The supply potential is limited by their rarity and the long and complex process of mining and refinement.

Gold and precious metals production cannot keep up with the printing of a currency that comes out of thin air. The Fed is rapidly increasing the monetary base, as shown by this chart. That is no secret, but many investors are unaware it is happening to this degree. Investors who see this and understand the potential ramifications are moving into precious metals by setting-up a self-directed Gold IRA.

A demand for precious metals is a long-term aspect of monetary history. People have valued gold as a store of wealth throughout human history. The current demand for gold indicates that precious metals will continue to function as a store of value in the coming years as developing nations emerge, China and Russia continue their stockpiling, and the worldwide supply of gold remains limited as central banks add to or hold onto their supplies.

With the demand for precious metals steady or on the rise, and as nations continue to print fiat currencies to stave off a looming global economic downturn, gold can be expected to continue to hold its intrinsic value and act as a form of wealth insurance in many investment portfolios.

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The Long-Run View

When considering an investment in precious metals such as gold or silver every investor should keep a long-term perspective in mind.  The price of precious metals does fluctuate over the short term, especially when governments are actively manipulating the markets as they have been recently. Don’t let that scare you.

Ultimately, the price of gold and other precious metals will continue to rise as the US dollar and other currencies continue to weaken and lose value. The dollar is being managed through a long-term decline. The value of gold in dollar terms moves up as the dollar weakens, but the move can be choppy. That is especially true today with central banks around the world actively entering the gold and other precious metals markets to manage and control price movements over the short-term.

There will be periodic price declines especially when the government is manipulating the market as it has been doing recently. Buying gold can be a wonderful investment for the investor who realizes that perseverance and patience are required when working with precious metal investments. Gold is something that possesses a unique, long-term monetary value in the economic affairs of man.

Investing in the stock market can be a good way to make money in the short term, especially in the US when the Fed holds interest rates low and continues to flood the canyons of Wall Street with currency. But as long as a fiat currency is connected to the worth of stock you will always be at risk of losing your investment should the market collapse, the business go bankrupt, or the nation suffer another severe economic downturn. These negative events tend to happen quickly, making it difficult for many investors to react  in time to preserve their wealth. On the other hand, if you physically possess precious metals, even when short-term price is choppy or declines, your wealth will be protected over the long-term.

Investments In Gold or Silver

Investors can now easily purchase precious metals for their portfolios. Investing in gold or silver has grown in popularity with many companies now offering products. There are numerous ways to buy and sell precious metals online, and to set-up a self-directed IRA to hold gold, silver, platinum or palladium

You asked the question, “Should I invest in gold?” For many people, the answer is Yes. Buying gold or another precious metal is easy. You need to decide which precious metal you would like to buy, the form of gold or another precious metal you want to have such as in a bar or coin, and then you can order through a precious metals dealer to place the gold in a self-directed IRA or you can take delivery at your home. In a matter of days you can have your gold or another precious metal delivered straight to a depository account for safe keeping or to your address. An important advantage to buying precious metals online is that many of the dealers keep their costs quite low and affordable. The premiums over the spot price for bullion bars and coins is usually quite low.

If you are interested in gold or silver as an investment you should start by getting your copy of the free Investment Guide available through this site. A very effective way to hold gold or another precious metal is in a self-directed gold IRA. Setting-up a precious metals IRA is easy to do. Get you free guide. The guide shows you everything you need to know.

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A top ranked precious metals dealer is Regal Assets. Many investors have posted on their site describing the good experience they had while making their purchase.  This record of good customer experience has made Regal the preferred gold or silver company for many.

Regal requires a minimum $5,000 investment for the purchase of precious metals, or a minimum $10,000 for an IRA set-up. The Regal staff is competent, friendly and very helpful. It is a very good place to start.

You can get started with the precious metals IRA rollover kit available through this site. Just fill out the form on this page and the investment kit will be sent to you.

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