Wise investors well know how important it is to protect wealth from an economic crisis and they seek also to grow that wealth simultaneously. Diversifying investments is a technique that has proven helpful to all kinds of investors seeking to accomplish their investment goals. Many professionals agree that a truly diverse portfolio is the one that includes some form of precious metals investment; importantly an IRA approved precious metal. With a Self-Directed IRA account, investors are able to add precious metals to their investment portfolio to create a hedge against inflation and to diversify their portfolio.
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Precious Metals Investing
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In order to qualify for a precious metals IRA, the metals have to have a high level of purity to be acceptable. In other words, the bag of old gold coins may be of some significant value in the retail market, but most often they cannot be included in an IRA account as they do not meet IRS standards.
Gold
Only 24 karat or 99.9% gold coins and bullion are acceptable in an IRA. They should also be certified by COMEX or NYMEX-approved refiners. 24-karat gold coins, such as the Canadian Gold Maple Leafs, gold American Eagles, and Austrian Gold Philharmonics are approved by the IRS.
Silver
Silver coins and bullion that are .999 or higher are included in the list of precious metals approved for an IRA. Silver coins made before 1965 in the U.S are not allowed because they contain very a high percentage of base alloy. Silver coins such as Mexican Silver Libertads, Silver American Eagles, and Canadian Silver Maple Leafs meet IRS standards.
Platinum and Palladium
Coins and bullion made from 99.5% pure platinum or palladium are also acceptable, provided they come from a NYMEX or COMEX approved refiner. However, the market for these precious metals is much thinner, so many people prefer to opt for Gold and Silver for their IRA accounts. When the time comes to sell the gold or silver it is often easier to do so if the market is larger and more active, with many buyers and sellers.
Gold and silver have always been associated with money and as a store of value. They equally share a very rich historical background in terms of being money and representing wealth. Gold is known as the symbol of wealth and prosperity, while Silver is seen as a metal that also signifies a prosperous economic status. Both the metals have long served as money and a store of value. Gold in particular has long been a store of value and has served as the foundation for wealth even as paper currencies have come and gone.
On the other hand, silver may not have the same exclusive wealth status as does gold, but this doesn’t mean it is not valuable as a store of wealth; it is. Silver is widely used in many metallurgic industries. Silver is assumed to be a premium commodity, with restricted accessibility.
If you are considering investing in gold or silver, you should take a quick look at the pros and cons of investing in either before taking any decision.
The Pros of Investing in Silver
The intrinsic value of Silver is not affected with currency devaluation. This is because the intrinsic value of the commodity is not tied to any specific currency. Silver is widely used in industry. It is also used as a primary component in various drugs in the form of silver nitrate. Silver is comparatively cheap on a per ounce basis. Silver may be widely used as a medium of exchange during a period of economic collapse.
Cons of Investing in Silver
Like all other commodities, silver is also subject to price corrections. Those who do not intend to hold it for the long-term may suffer from losses over short durations.
Pros of Investing in Gold
Gold is considered a safe haven investment. It can be held as tangible wealth, for as long as intended. The intrinsic value of gold is steady even if the price in terms of a currency moves up or down. Nowadays, gold is actually one of the most expensive commodities in the market. However, it may undergo price declines in terms of the Dollar. The price for Gold has tripled over the decade following 2003. Gold items can be easily converted into cash at many gold shops. Goods and services can also be purchased in exchange for Gold.
Cons of Investing in Gold
The price is volatile, and gold has been actively suppressed in price by central banks around the world in the period following the financial panic of 2008. At current prices, not many people can afford to invest in this commodity.
Summary – IRA Approved Precious Metals
IRA approved precious metals can turn out to be a great way to diversify and protect your retirement accounts. This is because these precious metals have intrinsic value, they are true money, and they may act as a hedge against negative economic conditions such as war, inflation, and housing bubbles.
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