Precious metals are an easy way to diversify your retirement savings, which may reduce risk and possibly even increase returns. You’ve certainly heard the advice “not to put all your eggs in one basket. As cliché as it is, the advice is certainly valid when it comes to retirement planning. The answer to the question of whether precious metals can be an investment for retirement is now yes.
The two most popular investment options are buying physical precious metals or buying stocks. When you buy physical precious metals, you can have gold coins or gold bars that you can sell in the future. When it comes to stocks, precious metals are known for withstanding market fluctuations, giving you greater opportunities to diversify and expand your retirement portfolio. Gold is generally not a good investment, particularly not for a retirement portfolio.
While it is somewhat useful as a countercyclical asset and can be used as a store of value, it is volatile and regularly shows sharp price declines. Investors saving for retirement should generally stay away. Given this fact, investors might want to turn their attention to investing in gold as a retirement plan. While there are advantages and disadvantages to using gold for retirement planning, which you can learn more about here, many successful investors regard the precious metal as a safe investment.
However, it’s important to consider certain factors before investing in these precious metals so you know if it’s a good idea for you. It is one of the most popular and sought-after investments in the world, especially as it can offer lucrative returns for any retirement account. According to Drew Feutz, certified financial planner (CFP) at Market Street Wealth Management Advisors, perhaps the most important thing is that precious metal IRAs are more expensive than other investment options. From physical gold to stocks to gold-backed assets, there are a variety of options for those who choose to use gold to prepare for retirement.
It’s a good idea to contact your investment advisor or insurance broker to find out more about how you can maximize your retirement savings. And that makes it a poor choice for the kind of reliable, long-term investments that retirement requires. Precious metal stocks work just like any other stock you invest in, in the hope that the company is successful and that the value of the shares you buy will increase. Thankfully, there are more ways to invest in precious metals that don’t involve direct ownership of gold itself.
The IRA custodian bank processes the payments and the dealer sends your precious metals to the custodian. Second, while gold and other metals have held their value over the long term in the past, they could fall short of the performance of other asset classes such as stocks, particularly when reinvested dividend growth is considered. But should you add this precious metal to your retirement portfolio? Gold can be a highly volatile asset with an unpredictable price that rarely correlates with stable growth. Precious metal certificates aren’t really considered stocks, but they’re also a type of investment that doesn’t require holding actual precious metals.
If you’re still convinced that gold is right for you, you can invest in funds that own gold, although many gold fans, often referred to as gold bugs, prefer to buy the physical metal, although this may mean additional storage and insurance costs. This metal does not tarnish or wear off like most metals, such as silver, do. A golden brick from 1,000 years ago may be dusty, but it will be just as bright as the day it was minted. One of the first and perhaps most obvious gold investment options for your retirement portfolio is physical gold.