Company Name: Lexi Capital
Website: http://www.lexicapital.com
Founded: 2010
Owners: Steve Kennedy – Principal and Marketing Director
Location: Raleigh, NC 27603
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How to Buy Gold Bars
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When diversifying your investment portfolio, you should consider the benefits of an investment in a physical gold IRA account. It’s an increasingly popular method to diversify a portfolio and that’s the reason a number of custodial companies provide services for both physical and non-physical precious metals IRAs. Gold investment products are available in the form of bars, coins, rounds and even ingots. On the other hand, non-physical gold products include ETFs (Exchange Traded Funds) and gold mining stock.
Even though retirement accounts backed by gold can hold both forms of gold, the majority of people who set-up a gold IRA prefer to keep physical gold as opposed to stock or even ETFs. This article will review how to buy gold bars safely.
The Benefits
The main advantage of purchasing physical gold is that it’s tangible, having intrinsic value. On the other hand, ETFs or stock are nothing more than paper assets. This means that in times of economic downturns, gold in physical bars and bullion will likely cushion your portfolio, unlike stocks and ETFs.
With ETFs, money is invested in gold products through a series of financial methods that are rights to gold but often not direct purchases nor storage of the physical gold itself. Due to the volatility of financial markets, stock investments in mining companies are exposed the the risks of markets plunges. The advantages of holding physical gold metals are better still when considering the tax deferment advantages of holding them in a self-directed IRA.
IRA’s backed by Gold are not so different from traditional IRAs. The primary difference is that gold-backed IRAs hold the physical gold bars or coins instead of paper asset. With the steady decline in the US dollar not being very predictable and perhaps quite dramatic at times, diversifying your portfolio using physical gold provides protection against a plunge in the value of currency.
Another advantage of a gold-backed IRA is that the process of setting one up is straightforward and simple. In fact, you don’t even have to do the purchase and storage yourself. You only need to choose a custodian company to do that on your behalf. Once the purchase process is done, the metal will be vaulted using a depository service. This eliminates the need to worry about the process of transfer, storage or even insurance. These things will be taken care of for a small fee.
Gold-backed IRAs are also convenient for people who are already thinking of transferring all or a portion of their existing account to a self directed IRA. Whether you are holding a traditional Roth, SEP or just a simple IRA, performing a rollover to a Gold IRA is quite simple.
How to Buy Gold Bars
When buying gold bars, you need to do some research to understand all the factors that come into play when investing in gold bars or coins. You should start by considering the following three things:
(a) The size of the bars
(b) Where to get them
(c) The hallmark recognition and liquidity
The different sizes
Gold bars vary in both size and weight. The measurements are done in grams, ounce or kilo. You can buy as little as 1 gram, 1 ounce, 1 kilo, all the way up to 400 oz gold bars.
When determining which size to purchase, you need to consider the amount of money you have, your liquidity aim, brand recognition, and the premium.
Generally speaking, the larger the size of the bar, the less the premium you’ll pay per ounce. The reason being, it’s less costly when producing a larger gold bar compared to a small ounce bar.
Lastly, the larger the bar, the smaller the number of investors who can afford it. In summary, not so many people can afford a 400 ounce gold bar, but they can comfortably afford a 1 ounce gold bar.
Where to Get Gold Bars
You can buy them through a bullion dealership or even on auction sites like eBay. Some people buy them from local coin shops, while others simply buy them directly from banks.
These retail shops support all forms of payment, including credit card, wire transfer, checks, PayPal etc. Again, when buying, pay attention to the ratings and reviews of the dealers or sellers. If someone is selling gold bars or coins for cheap, it doesn’t mean they are the best deal. Trustworthiness, reputation and past performance with other customers is very important. Any investment decision requires that you focus on the quality of the seller as opposed to the price alone.
Liquidity and Hallmark
Being able to liquidate your gold should be easy and quick. Again, when buying, you need to purchase gold bars from trusted and reputable dealers. Check-out the dealer reviews and ratings prior to purchase.
If you buy from someone who doesn’t have a good reputation, you increase the risk of buying counterfeit or low grade products. A top tier dealer will agree to buy the gold back from you at the spot price. Take the time to ask dealers about re-purchase terms.
Conclusion
There you have it. You now know that investing in gold bars is a powerful way to diversify your investment portfolio. You also know how to choose the dealer and make the purchase. Take responsibility for your investment portfolio with a self-directed IRA and you’ll be safe during those times when paper assets are not so stable.