Is Putting Physical Gold in an IRA a Smart Strategy?

Guest Post from James Cordelaine of Goldco Precious Metals

With the stock market stumbling well into the second quarter, and reckless central bank experiments with low- to negative interest rates sucking away the value of currency, investors big and small are flocking to gold and silver.  Prices are up, as are sales of gold and silver coins.  This is a perfect moment to discuss putting physical precious metals into a gold IRA, or rolling over your 401(k) to a gold IRA that can protect you from market volatility, as well as currency devaluations and inflation.

First, when we talk about rolling over an existing IRA or 401(k) to a gold IRA, that doesn’t mean taking the entire value of your account and purchasing gold.  You can maintain a mix of stocks, bonds and cash.  But with a gold IRA you also have the opportunity to put the percentage of your savings that you choose into a tangible asset, i.e. an asset that has intrinsic value.  Stocks and bonds are only worth what someone is willing to pay you on a given day, but gold and silver coins are inherently highly valuable.  Their value also tends to move inversely to the stock market and the dollar, so when the market and the dollar go down, precious metals tend to rise in value.  That’s why they’re traditionally used as a hedge against market volatility, and a dollar that just doesn’t buy what it used to.

But if gold and silver are such great investments, why hasn’t your financial advisor recommended them? Two main reasons: First, many advisors only have expertise in paper assets such as stocks, bonds, and mutual funds.  Since they can’t speak knowledgeably about physical precious metals, or perhaps don’t even understand their place in a properly diversified portfolio, they tend not to mention them.

The second reason is that many financial advisors work for the banks and brokerages that sell stocks, bonds and mutual funds.  They’re encouraged, even compensated, for recommending and selling what that firm offers.  It’s a powerful incentive for advisors to stick with investment products they know well, and to avoid, or even down-talk assets they don’t understand.

The bottom line is if you’re interested in protecting your retirement savings by hedging with physical gold and/or silver, you may need to find your own information on how products like a gold IRA can provide a safe haven for your retirement funds.


Guest Post from James Cordelaine of Goldco Precious Metals


Gary Christenson

The Deviant Investor