Experts continue to recommend that at least 10% to 30% of a person’s liquid net worth should be invested in precious metals like gold. So why has gold remained such a wise investment option for so many?
There are a number of reasons, including:
- Gold prices have trended upward for the past 10 years and experts expect them to continue rising – in fact, many experts now believe gold could reach as much as $5,000 or even $10,000 an ounce at some point!
- The value of gold has remained steady over time – for example, gold 100 years ago would have bought the same amount of goods as gold today … this makes gold a safe haven against inflation and financial crises!
- Thanks to the increased knowledge by both investors and gold brokers it’s now much easier to invest retirement funds in gold
- You get to avoid all those costly brokerage fees that commonly accompany stock investments
- You diversify yourself against the risks of investing solely in stocks, bonds and mutual funds
The analysts are saying that among the factors that could send gold prices soaring again are: inflation, currency devaluation, supply and demand, industrial use of gold and increased demand from both central banks and from the economies of emerging countries like China and Japan.
The Wall Street Journal recently reported that “The average person age 60-62 with a 401k account has less than one quarter of what is needed to maintain their standard of living.”
In many cases it’s not the individual’s fault – many saw years of saving wiped out by the 2008 financial crisis.
Diversification into gold and other precious metals now could help protect you against similar crises in the future.
While the U.S. dollar has lost value for 40 years and now has just 20% of the purchasing power it had in the 1970s, gold has remained strong.
Stock and currency investing is turbulent and experts are saying that we can no longer rely on Social Security or the government to take care of us when we retire, gold has remained strong.
No wonder countries like China and India are stockpiling gold with an eye toward the future.
When it comes to investing in gold, there are two basic options: bullion bars and coins, which are public gold, and private coins, which are also called investment grade.
Bullion coins are coins that are minted in a large supply and are still being minted today. They track directly to the spot price of gold. If gold goes up a dollar then their price will also go up a dollar and if gold goes down then they will lose one dollar in value.
Private or investment coins are coins that are no longer minted. In fact, they stopped being minted in 1933. They typically track higher than the spot price of gold so when gold goes up a dollar the private or investment grade coins go up usually three to five dollars.
Also, if the price of gold drops, the older investment coins usually have a natural resistance to the drop and maintain more of their value because of limited supply and high demand.
The final difference between bullion and investment grade is that bullion or public coins are typically subject to the capital gains tax while the pre-1933 coins are considered to be a private or non-reportable liquidation.
To learn much more about bullion and investment grade coins or to invest in precious metals and start growing your retirement savings, please contact RC Bullion at 213-465-4835
