New ways to invest in gold and other precious metals are appearing all the time. Whether you’re a complete novice, or someone who already has experience using gold as a method of wealth protection, opportunities abound. Please consider the following methods for how to invest in gold and other precious metals, and also review some of the advantages and disadvantages inherent in these methods.
As a result of the current global climate, and the monetary policies of the Federal Reserve, conscientious investors realize that portfolios that are loaded with stocks and paper currencies are increasingly becoming more and more precarious.
As a result, cautious and forward thinking investors are reviewing their position in gold and other precious metals. When it comes to wealth preservation, gold has always been a safe bet for the long haul, historically; the average age of paper currencies is a mere 39 years old. Gold has consistently been used as an investment tool and as a means of increasing purchasing power throughout the entire history of human civilization.
The tide started to turn after the 2008 financial crisis, and ever since then, there has been increasing growth in gold investment. This boost in demand for gold is a result of investors not necessarily wanting to “play ball” with the new economic policies by different governments across the globe. For the most part, the “powers that be” have exhausted all of their available avenues to economic growth. The only option they have left, is a radical debasement of their respective national fiat currencies.
The central banks of Japan, China, Australia, and various European countries are all manipulating the value of their currency in drastic ways that are unprecedented. These countries are engaged in what many analysts are referring to as a “race to the bottom”. It’s like Darwinism in reverse; the country with the weakest money wins. However, that’s just what it looks like at face value, and if you do your research, a different picture emerges.
The fact is that national banks and monetary authorities such as the Federal reserve are dropping the purchasing power of fiat currencies on purpose. Devaluing the money affects you, me, and businesses of all sizes. Once the damage is done, and the smoke clears, these same government entities will bolster the price of gold worldwide.
As a result, now is the time to get on the ground floor, invest in gold and other precious metals to protect your wealth. The current investment demand for gold is rising because smart investors can see the writing on the wall; they know that gold has ALWAYS been the hedge when fiat currency is being devalued.
What Percentage of my Portfolio Should Be Invested in Gold and other Precious Metals?
Each and every successful investor has one thing in common–they know that it is vitally important to ensure that at least 5-20% of their entire portfolio should be invested in precious metals and/or commodities.
These investments will give you a backup plan of sorts, so that if the worst case scenario happens and you lose all of the money from your other investments, or the dollar crashes in value, or even if the stock market falls, you have a solid and consistent investment remaining. Despite a crumbling economy, palladium, silver, platinum, and gold will maintain a high value.
In this situation, the value of precious metals increases as the demand increases and money currencies crumble. Having a section of your portfolio designated to precious metals will protect the value of your portfolio as give you the stability that will be vital in periods of economic turmoil. Most advisors would tell you to keep your precious metals in this situation rather than selling them, however. This is the wiser decision because you will want to preserve your wealth, which is more important than gaining.
One of the most important things a multimillionaire needs to do is maintain a portfolio that is diversified and saved for the sole purpose of retirement savings. Precious metals are the best method of doing this, through what is known as a precious metals individual retirement account, also known as an IRA. When investing in an IRA with gold, a Gold IRA custodian is required. The UK has a similar program known as SIPP, or Self-Invested Pension Plan. Each of these account types will use your retirement savings to invest in gold and yields many tax benefits.