Why Add Gold To An IRA?

Many investors may wonder why they should consider adding gold or precious metals to their IRA holdings. This is a fair question, as your IRA likely represents the major portion of your financial holdings. While there are many reasons investors might consider adding gold, here we will highlight some of the major benefits of gold ownership and discuss briefly how gold may help protect your financial future.

Portfolio Diversification

Gold and precious metals can allow an investor to further diversify their portfolio. By adding precious metals to one’s portfolio, he or she is adding what we feel is a key asset class in the overall investment spectrum. Precious metals like gold have shown little correlation to stocks and bonds, and therefore may potentially reduce volatility in one’s investment portfolio.

Hedge Against Inflation

Gold and precious metals may potentially help insulate one from inflation. In an environment of rising prices, goods become more expensive and one’s purchasing power declines. A hard asset like gold or like silver may potentially rise as overall prices for goods and services rise. Should the price of precious metals rise, it can potentially help offset some of the higher costs being seen and help preserve one’s purchasing power.

Hedge Currency Weakness

The dollar has been losing value for some time. This could be attributed to many things but the fact that the Fed has continued to pump the economy full of artificial dollars through measures like quantitative easing is not going to help boost the greenback. The dollar has seen its purchasing power decline. What a dollar bought a year ago a dollar cannot buy today. Precious metals ownership can potentially help insulate one from currency depreciation or other currency issues and protect wealth.

Geopolitical Risks

There is a lot going on in the world we are living in today. Russia, North Korea, civil war in Iraq, Israel and Hamas-it seems that there is conflict everywhere. Gold is considered by many to be a “safe-haven” asset due to its long history and track record of reliability. Gold prices have the potential to rise during times of geopolitical upheaval or economic turmoil.

A Reliable Store of Value

Gold has been a reliable store of value for thousands of years. Currencies and governments have come and gone, but gold has maintained its status and reputation as a reliable asset throughout its history-and we don’t see that changing anytime soon. Gold is recognized all over the globe for its value and can be transacted anywhere in the world without counter-party risk.

This list is by no means extensive or complete but it does simply aim to highlight some of the reasons that gold and precious metals may potentially fit into your portfolio. For more information or to talk to an IRA advisor about how to rollover your 401(k) into a Gold IRA by opening a self-directed IRA account, contact us or call us at 800-341-8584 today.


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