Why Gold IRA’s Are Worth Their Weight in Gold
Given the economic uncertainty being caused by the combination of supply chain issues, rising inflation and the ongoing impact of the pandemic, it’s no surprise that investors are turning to gold IRAs as a key element of their portfolios.
Why? Gold IRA’s are literally worth their weight in gold for a variety of reasons. What follows is a rundown of why this is the case, along with some numbers that will almost certainly surprise you and plenty of other useful information.
Gold By the Numbers
There’s a lot of opinion and common beliefs thrown around when it comes to the value of gold as an investment, so let’s take a look at some numbers when it comes to the actual value.
If you bought gold in September of 1999, you paid a price that was either at $255 an ounce or slightly above or below that number, so we’ll use that as our baseline number.
Fast forward less than a year—if you bought gold in August of 2020, the price was $1937 per ounce. If you bought in March of 2021, that same ounce was going for $1737 per ounce.
That means that depending on when you made your purchase, your return was 5-6 times what you paid. Yes, there was some retrenching going on from 2020 to 2021, but that kind of return is hard to come by in any part of the financial markets, especially if you’re trying to do it with a vehicle that has an established track record.
The Gold IRA Trend
It is that track record that’s helping gold IRAs become an established part of many high-end financial portfolios.
Why? Well, there’s the rate of return, obviously, but savvy investors understand that it’s a great way to balance a portfolio. The balancing part refers to the fact that gold prices tend to move in the opposite direction from paper assets like money.
A gold IRA can function as an insurance policy against rising inflation, and this makes gold a great choice when it comes long-term investment vehicles like IRAs.
The Convenience Factor
Before the subprime crisis of 2008 and the Great Recession that followed, there was little demand for gold IRAs. The rules and procedures to establish them were perceived as labyrinthine and complex, which meant investors had to put in a lot of time to get a gold IRA done.
Not anymore. Record gold sales led to the formation of literally dozens of companies offering gold IRAs, and while there were some fly-by-nighters, there were also plenty of solid companies formed by financial experts with long, successful track records of their own.
Those companies made it much easier to get a gold IRA, and sudden procedures like finding a custodian or an approved depository became relatively simple.
As a result getting a gold IRA has become a one-stop shopping experience, unless you want to take a little bit of time to compare some of the companies and go with a mix-and-match approach.
Joining the IRA Community
One of the reasons that gold IRAs weren’t as popular prior to 2008 was the unfamiliarity of the product.
Many investors didn’t even realize it was possible to fund an IRA with gold, and they had no idea if gold IRAs were different than conventional ones when it came to rules, general performance and the advantages they offered.
Today, however, it’s a brave new world with regard to that part of it, and gold IRAs typically offer most or all of the advantages of conventional IRAs, and as the previous numbers show, they can sometimes outperform their conventional counterparts by a significant amount.
Gold IRAs can now have the same format as conventional IRAs, or they can come with Roth options. Moreover, those with an interest in holding physical gold as part of their portfolios can now do that via a standard set of procedures that definitely aren’t arcane or complex.
Moreover, there’s even a buy-back option. If you get dodgy about your investment for whatever reason, the top gold IRA companies will even guarantee that they’ll buy back your gold at whatever the current wholesale rate happens to be at the time.
This isn’t even a possibility with a conventional IRA, and it speaks to the new truth when it comes to gold IRAs, which is that they literally are worth their weight in gold.