Get Started with a Gold Investing IRA

• Gold is a smart way to diversify your investment portfolio, but converting your retirement savings into gold comes with some caveats.
• First, gold IRAs are strictly for retirement savings, so you can't use them to access money before you reach retirement age.
• Second, converting your retirement savings into gold means you give up certain federal protections.
• You'll have to pay capital gains on your gold investments, and you cannot contribute your gold IRA to any type of tax-advantaged retirement plan, such as a 401(k) or IRA.

A gold IRA gives you the freedom to invest in gold and other precious metals. For investors, gold exposure provides diversification and protection from inflation. For gold producers, gold demand provides stability, a commodity to trade, and a source of hard currency.
For investors, a gold IRA offers many advantages. Gold is a store of value, so its value shouldn't go up or down as much as paper assets.

Why Invest in Gold?

Gold and silver are the most stable forms of money that we have. While paper currencies are issued by governments, the value of those currencies can fluctuate greatly. For example, as the chart below shows, the USD has depreciated by 95% against gold since the U.S. went off the gold standard in 1971.
Gold can also be a useful hedge against inflation. Investors who hold gold and other precious metals often see them rise in value as inflation increases.
A gold IRA offers a number of advantages, including:
Diversification: Gold is both an asset and a currency, providing both good diversification and protection against inflation and deflation.

Security: Gold IRAs are subject to the same rules as regular IRAs.

Tax-advantaged growth: Gold is exempt from capital gains tax.

Low maintenance: Gold and other precious metals are liquid assets, which means that they can be quickly converted into cash.

Freedom: Gold IRAs are regulated by the IRS, and you are able to choose your own custodian, investment options, and precious metals.

The Benefits of Gold Investing

Diversify Your Portfolio
Gold offers a hedge against inflation, but plays second fiddle to stocks and bonds when it comes to capital appreciation. Gold's ups-and-downs usually don't match those of the S&P 500, and this makes gold a good hedge against stocks.
If you're looking to diversify your portfolio with assets that are less correlated to the stock market, gold investing is a good strategy. Gold prices typically move in the opposite direction of stocks, and this makes gold a good hedge against the stock market.
While gold's price history shows periodic increases and decreases, its long-term average returns are typically around 10%. This means that an investment in gold historically has enjoyed a return that is roughly double the long-term return of the S&P 500.
Returns from gold investing are uncorrelated to short-term fluctuations in the stock market.
Gold is also considered a safe haven asset. When investors worry that the stock market will drop, they turn to gold.

IRA Gold Investing

Diversification: In October 2011, congress passed a piece of legislation allowing individuals to own physical gold. This legislation, known as the 2011 Tax Relief Act, allows investors to invest in bullion through an IRA, 401(k), 403(b), or 457 plan.
Diversification: Gold is backed by tangible assets, not paper assets. Gold is undervalued compared to paper currencies, which are prone to inflation and devaluation.

Low Volatility: Gold tends to move in the opposite direction of the stock market, which helps reduce risk.

Inflation Protection: Gold maintains its value over time, and is immune to inflation. This can help protect an investor's purchasing power.

Limited Supply: Since gold is a natural resource, there is a limited amount of gold in the world. Therefore, its value tends to have increased scarcity over time.

Do-it-Yourself Gold Investing

If you're looking to invest directly in the metals, there are several options available. You can locate a gold IRA company, some gold bullion dealers, or a gold dealer that offers IRA storage options.
You can invest in gold through an IRA, which is an individual retirement account. The benefits of an IRA, in addition to tax and estate planning advantages, include:
An IRA account can be self-directed, meaning you can choose precious metals, commodities, or real estate as an investment option.

You can invest in gold, silver, platinum, palladium, and other precious metals.

You can own precious metals or gold by trading futures, options, or stocks of gold or gold-mining companies.

You can invest in precious metals through an IRA, 401(k), or other employer-sponsored retirement plan.

You can invest in collectibles, including gold, silver, diamonds, and artwork.

Types of Gold Investments

The Internal Revenue Service (IRS) allows investors to invest in gold in an IRA. You can easily roll your old 401(k) into a gold investing IRA.
Gold ETFs are a popular gold investment because they are inexpensive and widely available.
Physical gold is another popular gold investment. You can hold it in a vault or in your own home.
Gold mining companies are another popular gold investment.
Gold mining stocks are another popular gold investment.

Gold ETFs

These ETFs hold gold bullion, which investors buy and sell through an exchange. Investors can acquire shares through a broker.
Precious metal IRAs
Investors can acquire physical gold, silver, and other precious metals through a precious metals IRA. The precious metals are held in a depository safekeeping facility.

Bullion

Precious metals like gold and silver, or coins, are physical forms of investment gold. Bullion refers to any gold, silver, platinum, or palladium in any form. This includes coins, rounds, bars, ingots, and wafers.
Certificates

Paper gold, or certificates, are financial securities that represent the value of the metal. Many investors choose paper gold because it's more flexible than physical gold.

Gold Stocks

A gold ETF is a convenient way to own gold and also to invest in gold stocks. The iShares Gold Trust (IAU) is one of the most popular gold ETFs, with a weight of approximately 23% in the gold mining industry. The fund is trading at $131.52 a share.

Gold Bullion Coins

Gold Bullion Coins are physical gold coins that are backed by the US government for their weight in gold. They used to be issued as legal tender, but are no longer. The coins come in eight sizes, from 1/10 ounce to 1 kilogram.
Gold Bullion Bars and Rounds
Gold Bullion Bars and Rounds are gold bullion products produced by various companies. They are packaged in 1 ounce, 5 ounce, 10 ounce, 1 kilo, and 5 kilo sizes.

Gold Bullion Coins and Gold Bullion Bars and Rounds can be purchased from a coin dealer, bank or precious metals dealer.

Gold ETFs vs. Gold Bullion Coins

For investors interested in investing in physical gold, there are two major options to choose from: gold bullion coins and gold ETFs.
Gold bullion coins are minted by private mints or private entities and come in different forms, such as rounds, bars, and coins. They are produced by refineries from gold extracted from mines. There are two main benefits to investing in gold bullion coins:
Gold bullion coins are comparatively easy to buy and sell, because the process is not complicated.

Gold bullion coins can be purchased in very small or large amounts.

Gold ETFs, on the other hand, are baskets of physical gold. They invest in physical gold that is held in some repository and can be purchased or sold at any time. Gold ETFs offer several benefits, including:
Gold ETFs can be bought and sold instantaneously.

Gold ETFs facilitate the process of generating tax-deferred investment income.

Gold IRA Planning

Gold IRA investments are the ideal way to protect your retirement portfolio from the volatile stock market. Gold IRAs enable individuals to keep a portion of their assets in physical gold, thereby securing their future and the future of their family.
Gold IRAs have been around since the early 1980s, when the IRS allowed individuals to own gold and other precious metals as part of their retirement accounts. Most Gold IRA custodians offer a variety of gold bullion, including coins and bars.

Gold vs. Paper Gold

Gold bullion, unlike paper gold, is tangible. You can hold it, touch it, and see it with your own eyes. You can't do this with paper gold.
Paper gold, often referred to as gold certificates, is a certificate that proves you own a certain amount of gold bullion. The gold bullion is typically stored in a vault, and a certificate is issued for each gold bar or gold bullion bar.
Paper gold is more convenient than gold bullion because you don't have to physically own the gold or store the gold yourself. But, if a paper gold contract is lost or stolen, you have no recourse.