What are the Benefits of Investing in a Gold IRA?
As the pandemic continues to wreak havoc on both the supply chain and the markets in general, gold is becoming more popular as an investment.
Gold IRAs in particular are becoming something of a buzzword, and there are now plenty of companies competing for dollars when it comes to investing in a gold IRA.
Before you take the plunge, though, it’s important to do some homework, and part of that homework is knowing what the potential benefits are, so let’s take a deeper dive into some of them.
The Balance Benefit
One of the main benefits of investing in a gold IRA is that it’s a great way to balance your portfolio. The value of gold tends to move in a way that’s opposite to that of paper assets, i.e., as the money markets tend to become less stable and more devalued, the value of gold continues to go up.
The Stability Benefit
While some of the companies offering gold IRAs are relatively new to the market, the institutions that stand behind gold investments are rock solid.
Start with the legal change that opened the door for gold IRAs to start becoming more popular. It happened back in 1997, when Congress passed an act that allowed the use of gold and other precious metals as the basis for an IRA.
That stability extends to gold storage as well. The IRS determines where gold is stored, and the depositories where gold storage is allowed are very stable. Break-ins are occasionally mentioned as a possibility, but the fact is that this is a very rare occurrence that’s really negligible when it comes to the overall evaluation process.
The Variety Benefit
As gold has become more popular, the number of companies selling gold IRAs isn’t the only thing that’s expanded. The types of gold IRAs have grown as well, to the point where they’re now almost as diverse as their conventional cousins.
To wit: when you go to set up your gold IRA, you can base it on bullion or coins, and you can also set up your gold IRA to be based on actual physical storage or as part of a gold portfolio.
The world of coins can be especially fascinating for those who are interested, as there are many possibilities that will allow you to explore the unique history of gold.
Moreover, you can also get a Roth version of a gold IRA. This is solid evidence that gold IRAs have become more acceptable as mainstream vehicles, and it makes it possible for you to further diversify your gold portfolio.
The Market Price Benefit
When it comes to relatively recent returns, the gold IRA market now has a history of nearly a quarter-century to fall back on when it comes to evaluating performance.
That’s a drop in the bucket when it comes to the overall history of gold as an investment vehicle, of course, but it does allow you to track the ups and downs with more precision.
The results are impressive, and they show the strong correlation between the performance of gold and gold IRAs during a struggling economic period.
The value of gold IRAs grew steadily in the decade leading up to the 2008 subprime crisis, and the price of gold actually rose to about $2,000 an ounce in the years that followed as the economy began to recover. That added a lot of value to a lot of gold IRAs, and it also set the stage for what’s happened during the pandemic.
Once again, gold prices started growing significantly in 1999, when they were mostly fluctuating in the $300-500 range. They hit a value of $2,000 again during the pandemic, and while there has been a small correction, prices have leveled off in the $1.5-2K range as the pandemic continues to play out.
Most experts expect that to continue for at least the first quarter of this year, and possibly longer as efforts to corral the Omicron variant continue, along with the ongoing work to fix and restore the supply chain and the runaway inflation that’s become a key part of this crisis.
The Knowledge Benefit
One of the biggest hidden benefits when it comes to gold IRAs is the level of accumulated knowledge that’s now available to investors.
You can contact virtually any good gold IRA company and get a complete rundown on what the tradeoffs are, and this in turn allows you to do plenty of comparison shopping before you actually make a choice about which company to go with for your gold IRA or you can start by visiting our gold IRA reviews page.
It’s a win-win situation, but it’s also important to act. These advantages can’t be realized if you sit on the sidelines, and this is an ideal time to jump into the gold IRA market and start to get as many of these benefits as possible.