What You Need To Know If Considering A Gold IRA Rollover
Investing in a gold IRA rollover is growing in interest and the fact that you have landed on this page suggests that you are at least considering the option, maybe you have not yet made up your mind. But why should you, at least, consider investing in a gold retirement account?
With the price of oil currently falling and at a rapid rate, and the stock markets starting the year with a decline, a lot of people are showing concern with regards to their investment portfolios especially those connected to their retirement plans and this is one reason why they are looking to invest in alternatives. The gold market is a great way to increase your financial protection by diversifying your investments into something like a gold ira rollover.
In 1997, Congress passed the Taxpayer Relief Act which allowed investors to put away gold and other metals into a self-directed IRA. They were responding to investors who wanted to diversify their retirement portfolio from paper assets like cash, stocks, and bonds to add some tangible assets.
Edmund Moy, who is the leading Strategist for The Fortress Gold Group and was also the Director of the US Mint between 2006-2011, stated the following an article he wrote in September 2014: (click here for original source)
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“By 2013, the total amount of assets held in all the Individual Retirement Account’s set up in the USA totaled 6.5 trillion dollars, and out of that amount 2.5 – 4 percent were now in non-traditional forms, such as gold.“
He went on to state:
“And looking long-term, there are several risks that favor the continued growth in gold IRAs, such as the fragile global economic recovery, potential of aggressive inflation in the United States, growing concern of a major stock market correction and increased geopolitical risks.”
When it comes to building a diversified investment portfolio, investing in alternatives from the normal investments, needs to be considered. The main reason being that diversification helps balance out the variances in values of other types of investment commodities. Sometimes an investor may be heavily invested in a particular type of investment such as stocks or ETF’s, but with a diversified portfolio, they may well have stocks from various sectors from the retail sector to the tech sector.
When one of these sectors, such as the oil sector, is going through a bad patch, as it is at the time of writing this, the chances are good that sectors such as retail or tech stock may be doing quite well. This not only balances out losses from the oil sector, but it can actually help to increase the value of a portfolio significantly over time.
Investors Want More Diversification
True effective diversification is not just diversifying stocks and ETF’s, it is much more than that. More and more investors are looking to broaden their horizons by investing in things like REIT’s, corporate bonds, gold, and silver, as well as stocks and ETF’s.
BullionVault, who are a leading peer-to-peer gold-and-silver-bullion exchange, based in London, recently produced their annual report and analysis on how varying assets have performed over the last 40 years (1976-2015) in both the UK and the USA.
As you can see from the facts below, although not the number one performing asset, gold has beaten other key assets in its returns over the past 40 years and has this century outperformed corporate bonds by a considerable margin.
[box title=”ASSET PERFORMANCE LAST 40 YEARS” style=”glass” box_color=”#72982B”]
- Gold’s 40-year change (+669% gross of costs) has beaten inflation (328%), housing (598%, excluding costs + yield) and cash (cumulative 535%).
- Commodities have dropped below end-1975 levels (-3.05%);
- REITs are the best-performing asset both since 1976 (9,177% cumulative on reported performance before costs) and also so far in the 21st century (up 484% since 1999);
- Gold is the next best performer since 1999 (+340%) and then corporate bonds (160%);
- Since 1976 gold rose in all 3 years when US stocks lost 10% or more, averaging 9.6% gains. It averaged 11.3% when REITs fell the same, rising on 3 of 5 occasions;
- Cash interest rates have lagged inflation 16 times since 1975. Gold rose in all but 4 of those years, three of them 2013-2015;
Why No Portfolio Should Ignore This Investment
When it comes to building a diversified investment portfolio, investing in a gold IRA rollover should seriously be considered. One of the reasons for diversification is that it helps balance out the variances in values of other types of investment commodities. As has already been mentioned, an investor may be heavily invested in stocks or ETF’s, but a diversified portfolio will have stocks from various sectors from the retail sector to the tech sector.
With all this being said, many people want to know how much this type of investment should be in a diversified portfolio. In addition, they want to know, why buy gold?
[service title=”How Much?” icon=”icon: info-circle” icon_color=”#72982B” size=”32″] [/service]The first thing to understand is that adequate levels of gold investment in a diversified portfolio should be somewhere between 5% and 10% of the entire portfolio. Some investors argue more is better, but levels from 5% to 10% are the industry standard.
[service title=”A Shelter Against Volatility” icon=”icon: info-circle” icon_color=”#72982B” size=”32″] [/service]The answer to why an investor should purchase this kind of investment is multifaceted. The first reason to invest is because it can be used as a hedge of protection against market volatility and inflation. Market volatility can affect the value of gold, but it typically affects it much less than other types of investments. One of the reasons for this is that the value of stocks, bonds and ETF’s are based on paper money and not in gold.
[service title=”Protection from Inflation-Deflation” icon=”icon: info-circle” icon_color=”#72982B” size=”32″] [/service]Inflation has always been a concern because inflation weakens the value of paper money. However, gold does not labor under the same constraints as paper money. It has a value that is established mainly through demand. Paper money can be weakened when there are shifts in power from one country to the next, or when there is some sort of political upheaval. In some cases, paper money can be rendered completely worthless, should the affairs of a particular country get bad enough. It is in these situations, gold benefits the investor.
Gold has had a remarkable performance during times of inflation and also deflation. Inflation is basically a period when the economy of a nation is struggling and the cost of living is high. During these times, gold prices tend to increase and that’s why it is often regarded as a ‘hedge against inflation’. Deflation, on the other hand, is when the economy is also struggling and business activity is quite slow. During deflation, it has been seen to perform well too. (check out my page on inflation and how it has impacted on us over the years)
[service title=”Value” icon=”icon: info-circle” icon_color=”#72982B” size=”32″] [/service]Another thing to consider is its value. While the value of gold did skyrocket some years back, reaching almost $2000 per ounce, it has since slipped to around $1200 per ounce (Current gold price can be found in the sidebar to the right). There is some discussion as to its value throughout the rest of 2016. Some experts are expecting gold to experience an explosion in value sending it closer to $2000 per ounce again. Other investors feel that while gold may not rise to this level, its values will steadily increase throughout 2016 and into 2017. Regardless, gold is at a good value and purchasing gold at current prices may be a wise investment as it is poised to increase in value, both in the short-term and the long-term.
[service title=”The Various Options for Investing in Gold” icon=”icon: info-circle” icon_color=”#72982B” size=”32″] [/service] Lastly, there are many different opportunities for an investor to purchase gold. It can come in the form of jewelry, collectible coins, legal tender numismatics as well as bullion. In addition, a gold investment can take the form of self-directed IRAs or gold backed investments, such as stocks in gold mining and refining companies. With coins being sold with as little as 1/10 of an ounce of gold, even an investor with limited capital can still invest.
It’s not difficult to see why it has been a popular investment for professional investors for many years. It’s also not hard to see why it still remains an extremely popular investment. If you’re looking to diversify your investment portfolio, but you’ve yet to venture into this kind of investment before, you may want to consider it now. With all the upsides of investing in it, it’s hard to ignore this valuable commodity.
Here is Why You Should Invest in Platinum
Platinum is probably the most under appreciated precious metal amongst investors historically, but we are now starting to see an increase in Platinum investment.
Its value is closer to gold than it is silver (at the time of writing an ounce is $866), however, the return on investment is not as great as either gold or silver, yet. This is probably due to the fact that over 70% of it comes from one country, South Africa and therefore, the return depends on mining and the economic state of the country. Currently (over the past 5 years 1/2010-11/2015) the return has been poor as its value as steadily decreased from $1,697 to $866 an ounce.
For the smart investor, diversification is key. It is for this reason that many investors have taken to investing in gold and silver, with an aim of protecting their savings in the face of an unpredictable investment environment. It does have a much shorter history in the financial markets than gold and silver, and this is because, for a long time, the price has remained significantly higher than that of gold. In fact, less than a decade ago, the price was 150 percent that of gold. Fast forward to today and the price has fallen to levels that are permissible for the willing investor. That being said, it remains scarcer than other precious metals, and for this reason, tends to attract higher prices per unit. These prices tend to change depending on supply and demand. During periods of economic uncertainty, the price tends to go down. This offers an opportunity for an investor to acquire it at reduced prices and diversify their investment portfolio in the process.
Reasons For PLATINUM Investment
If you are wondering whether you should be thinking of investing in alternative, like Platinum investment, the answer is yes. And here are the reasons why:
1. It has recorded a steady and improved performance in the market, compared to silver and gold (although of course, like all investments it fluctuates). In the past, there was not much popularity surrounding this metal, and many investors opted to go for gold and silver. In today’s market, it has proved to the point that it can hold its own, and many investors are turning to it in a bid to get better returns.
2. A strong demand for vehicles creates a higher requirement for it. It is not only a precious metal but an industrial one as well. It is used in catalytic converters, creating over 40 percent of its use. It is also used in other areas as a replacement for gold, such as for jewelry, dentistry and even in electronics. As auto sales increase, the demand will go up, resulting in better prices and higher returns for investors.
3. There are certain factors that could result in a lower supply, meaning better prices for the investor who already has it in their portfolio. Key on the list of factors is the fact that almost all (75 percent) of the world’s supply comes from South Africa. Reliance on one main producer means that any upsetting developments and instability in that country’s mining industry have a huge impact on prices. An example is the mine strikes and turmoil that occurs in South Africa.
4. Renewed growth in China is an opportunity for demand to grow, bearing in mind that China is one of the world’s biggest consumers of platinum jewelry. In fact, China is responsible for 23 percent of the world’s demand, and an increase in this demand will result in an increase in demand for the metal, hence higher production.
In order for it to be saleable in the commodity market, the ingots must first be assayed in a similar manner to what is done to gold and silver. If you wish to buy and store it in its physical form, you have the option of getting bars, coins, and bullion. If you are thinking of adding it to your retirement account, you will require the services of a custodian. The custodian will find the it for you, get the paperwork sorted on your behalf and keep the it safe for you.
Alternatively, if it is not for an IRA, you can opt to utilize various routes to invest in it. For instance, Swiss banks give the option of buying and selling the metal like foreign currency, by making specific trading accounts available. What this means is that you, the investor, will not own the actual metal. Rather, you will have a claim against the bank for a certain quantity of metal. This is a much easier route to follow, especially if you are freshly ventured into the field of investing in this and other precious metals.
There are several steps that you should take when considering Platinum investment.
• The first thing you need to do is gather as much information as possible. Investing in precious metals is a great way to protect yourself and your finances against economic uncertainties, and Platinum investment is no different, but you must be knowledgeable about what you are doing in order to succeed. If you are in doubt, always consult a financial advisor. In fact, a financial advisor should be the first person you talk to once you decide that you want to invest.
• Decide how much risk you are willing to take on. This should be arrived at after intelligent financial calculations. You must correctly determine how big a portion of your finances you are ready for Platinum investment. Precious metals are much less volatile than stock markets, mutual funds and so on, but it does not mean that they come with zero risk.
• Follow the correct procedure when investing. Unfortunately, many investors are scammed when investing in precious metals because they have no clue that there are proper channels and regulations that have been stipulated to regulate this type of investment. To avoid falling into this kind of trap, seek the services of a reputable financial advisor and only use the services of financial institutions that have been accredited and approved for such investments.
If you have been wondering how to protect your financial future, consider diversifying your investment portfolio. It does not matter whether you are building a nest egg for your retirement, or just saving something for a rainy day, precious metals, and platinum, in particular, have the ability to offer you financial protection.
Just like silver, this metal is both used for investment product and industrial use. As such, it can move out of direct linkage with gold based on the pushing and pulling occasioned by industrial demand. In the recent past, the platinum/gold spread has narrowed down to below $100 per ounce. This has been mainly due to gold’s falls. There continues to be widespread support for this alternative to gold, although the demand for it sometimes gets relatively muted.
Investors have been waiting on global stocks to get depleted, which would mean better prices because of the supply crunch. When it comes to comparing it with gold, it is important to remember that they have one main difference: while as mentioned it has investment and industrial appeal, gold is driven purely by speculators and investors. The market is also smaller and less liquid compared to gold.
During periods of low global economic growth, it is usual for both prices to converge. It is very rare for the price to fall below that of gold, and when this happens, it usually does not stay there for long. This is because both metals have hedge qualities. When the economy is booming and growth is at an all-time high, its price tends to skyrocket faster than gold prices.
If you are thinking of Platinum investment as a gold alternative, it is important to keep in mind that the current prices may not seem very attractive. However, a synchronized global economic growth is something that would boost its price. At the moment, the global economic growth is not synchronized, as can be seen from the recovery in the US and the UK but struggles in Europe and China.
Keeping in mind that the two largest markets as mentioned are autocatalysts in Europe and jewelry in China, a growth in these two markets will have a direct impact on rising prices.
Gold is facing competition from other assets such as properties and equities, meaning that it has not done as well as expected. That being said, investors who are interested in reaping long-term rewards continue to invest in both too.
If you are wondering which precious metal to invest in between these two, a deeper analysis of market trends and a consultation with your financial advisor should make things clearer for you. And remember, he who does not invest, does not stand the chance to reap returns.[button url=”http://transfs.com/buy-platinum” style=”flat” background=”#e3e0db” color=”#100e0c” size=”8″ center=”yes” radius=”round” icon_color=”#0f0d0d”]Click here to check it out[/button]
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We also discuss all issues relating to investing in gold ira’s
The Gold Market has Just Experienced A Historic 70 Year Breakout From Oil
A recent article on King Word News reported that the gold market has just done something that it has not done for 70 years, and that is it has held its price while the crude oil market continues to decline at an alarming rate. There have also been a number of reports in the financial media that gold too is on the decline, yet when you look at how gold has been performing over the last 12 months, it has fluctuated between $1250 and $1005 an ounce. Compare that to oil on the other hand over the same 12 month period and you will see that oil has dropped from a high of $60.13 a barrel to its current price of $31.35 a barrel.
As you can see from the chart to the side, both oil and gold have historically (although the chart only goes back to 2006) over the past 70 years, run almost along side each other, albeit except through the recession of 2008/2009.
What this chart, along with other data shows us, is that although gold has dropped in price since its 2012 peak, compared to other commodities and in particular, oil, it is performing very strongly, in fact, it is holding.
So what we are seeing here in this historic breakout, through gold holding its price while oil collapses, is that Gold is possibly now entering a bull market. It is of course too soon to predict, and many experts are saying although gold is not in a bull market yet, it is coming in 2016, the question is when?
What this separation from oil has shown us is that a bull market is getting close, closer by the day. Check out BullionVault for more information on gold investing
Earlier this year, CNBC ran a sequence of articles where they raised a number of valid and important questions as to why Russia wants more gold. (source)
The Central bank of Russia has announced plans to increase its reserve level from $300 billion to $500 billion. Now how Russia plans to do this is unclear, however lets look at three major facts for a moment that have negatively impacted on the Russian economy:
- Russia has for some time been trying to stabilise the value of the Russian currency, the ruble, by selling a mix of currencies including the US dollar.
- Its war with the Ukraine has brought about sanctions that has put them under economic strain
- As the world’s leading energy supplier, the fall in the price of oil has impacted on Russia greatly.
These factors, along with others, have contributed to the economy of Russia to actually contract by 1.29% and this is a result of 12 months of continual contraction.
graph courtesy of http://www.tradingeconomics.com/russia/gdp-growth
Now when you consider that Russia is the largest country in the world and the fifth largest economy, along with being the world largest producer of oil (no it’s not Saudi Arabia, there output is only 13% compared to Russia’s 14% (figures courtesy of Wikipedia)) along with gas, you can see why having a stable economy is vital.
So how are they going to do it?
Well one of the fastest and most common ways to bolster an economy is through the purchase of gold. In an article on CNBC, they stated:
“Rumors last week that Russia was on the verge of selling its gold reserves were quashed with the news on Friday that it has continued to add to its holdings. However, John Butler, chief investment officer at Atom Capital, and Alasdair MacLeod, the head of research at online bullion exchange GoldMoney Foundation, believe that Russian President Vladimir Putin could bring the country onto some sort of “gold standard” to try to shore up its economy. “
It is no secret that Russia does have an interest to distance itself from other currencies that are inflating in value. Putin wants to base the Russian economy on sound investments and the best way to do that is, through gold.
What evidence is there to suggest that?
Russia increased its holding of gold in December last year to just over 38 million ounces, an increase of over 1 million ounces from the previous month (source) and it continues to do so each month. Although the country is a long way off from having a currency that is backed completely by gold, it is moving in the right direction
When it comes to precious metals, gold is usually preferred by more investors than silver. However, what you need to understand is that just because gold is more popular does not mean silver is less attractive. In fact, adding silver to your portfolio is a great way to diversify and protect your investments. There are two types of silver commonly traded in the market today, and these are silver bars and silver coins.
If you are wondering which one you should go for, the answer is that both of them make for good investments. However, there are certain characteristics that make silver coins more desirable. For starters, silver coins can be bought and sold more easily than bars. When selling bars, you do not have the option of selling a portion, either you sell everything or nothing at all. This is not a problem that is experienced with silver coins.
The fact that silver coins are government-minted is another reason why many people tend to trust, and want to invest in, silver coins. Even when silver prices wildly fluctuate, it is unlikely for government-minted coins to be called into question. It is also important to remember that coins are universally accepted, and so for an investor, it makes a lot of sense to invest in silver coins.
The gold/silver ratio analysis shows that investing in silver coins is a wise move. This ratio is used to determine the absolute and relative prices of gold and silver, and while it currently stands between 50:1 and 60:1, it is expected to normalize to 16:1 in the near future. Coupled with declining below-ground supplies, it is expected that silver will be a much sought after commodity in the near future.
It is also important to remember that silver has a wide variety of uses, especially in the photography industry. As demand for industrial silver soars, it is expected that owners of silver coins and even silver bars will get great returns on their investment.
Investing in precious metals is a great way to approach diversification and protect your portfolio against economic fluctuations and inflation. And while some investors are skeptical about adding precious metals to their portfolio, those who have report no regrets. Go ahead and get yourself some silver coins. You do not have to invest all your money in them; you can simply set aside a small amount to invest in silver coins, and decide how to proceed based on the returns you get thereafter.
If you are interested in investing in silver, be it coins or bullion, then if you live in the US, check out my recommended silver coin and bullion supplier. If you live outside the US then check out this leading supplier of silver.
January 22nd – the European Central Bank announce that they will print over 1 Trillion euros to buy 60 billion euros worth of soverign bonds every month, for the 18 months )march 2014 – September 2015) See full story here at Bloomberg.com
George Soros, the billionaire investor announced that he strongly feels such action will “divergence between rich and poor bigger than it already is” He continued, “It will benefit the owners of assets and actually wages will remain under pressure through competition and unemployment.”
That benefit on assets has already started, with the price of gold increasing 3% in Euro terms, in just one day. (you can see how gold has increased over the past few months, and continues to do so on our precious metals price page)
So what effect has this actually had on the price of gold? Gold has returned to its key mark price of $1,300 and experts are already stating this is just the beginning.
If you are interested in looking at the investiture of gold further, check out our gold reviews.