For those looking to diversify their portfolios, it’s a good idea; for those looking to sink everything into one basket, not a good idea. For those looking to have some wealth in the event of some type of cataclysmic occurrence — think World War III — it’s a good idea; for those looking to invest into gold producing companies, keeping their fingers crossed that the price of gold will continue to rise in price, not a good idea.
Gold prices are at an all-time high ($1532.48 an ounce), and more people than ever before are investing in the most precious metal on the earth. Some are purchasing it in gold bars or in gold bullion, others collecting it in rare, old coins. When investors purchase physical gold like this, they are diversifying their portfolio in a way that inflation cannot touch, and yet guaranteeing some wealth in times of dire economic and social crises. An example of this is the Jewish people of World War II; many of them traded their paper money for gold before Hitler’s Nazi party began to steal their wealth in addition to murdering them by the millions. As such, some of their family and individual wealth was able to survive through the war. Gold truly is the purest form of money, and the oldest, most durable wealth-preserving asset on the planet. Governments can’t devalue it. It has no debts, no board of directors, no politicians or central bankers that can interfere with or manipulate its value.
Some choose to invest in “paper gold,” which may not be as advisable of an idea for every investor. This includes gold-backed IRAs and 401(k)s, which means that just as the other funds are allocated into stocks, bonds, and other investment vehicles of the account holder’s choosing and direction, part of the IRA and/or 401(k) funds would be allocated to gold in the form of Gold American Eagles, which are mass produced bullion coins. The only special regulation is that in order not to get penalized by the IRS, the IRA/401(k) gold must be held in depository through a gold IRA custodian'”usually a representative of the company the account holder purchases the gold from.
Virtually any responsible financial planner or advisor will tell his/her clients that making sure they have a diversified portfolio is an important strategy for retirement. That includes stocks, bonds, mutual funds, stocks, and even sometimes gold, silver, or other precious metals. When looking at the overall diversification of your portfolio, you might decide that gold'”or another precious metal'”is a missing piece to the most beneficial investment strategy that you can have. For others, the prices of gold and other precious metals might be too steep right now, and choosing to put such a purchase on the back burner for a while might be the best choice. Either way, considering precious metals as part of your retirement plan is a very wise decision indeed.