While gold has seen a steady five-year climb, the stock and derivatives markets have experienced extreme volatility. These erratic fluctuations have had negative impacts on IRAs, once considered relatively safe, long-term investments. Those who had planned for a comfortable retirement in 2009-2011 have found themselves needing to stay on at work; many are still working today, desperate to recoup their losses. Woe be it to the unfortunate investor who fell into poorly explained real estate or Maddoff-like investment schemes. If you are now looking at your rebuilt portfolio and concerned about its spread, backing part of an IRA with gold could be the right solution.
Creating a gold-backed IRA
It”s relatively simple and much less stressful than one would think. The United States Mint has created a specific coin meant for long-term investments as an IRA, The American Eagle Coin. Simply roll over part or all of the IRA into the coinage, and have your investment delivered to your home.
This process is also available for qualifying 401(k) accounts.
Be Your Own Golden Goose
Sitting on your nest egg eliminates quite a bit of stress. Keeping a close watch on your investments is prudent, however, market volatility has become so visibly tied to political fortunes of distinct world leaders that the market has begun to react like a flock of Starlings, darting from one roost to the next, scared by the slightest noise. It’s possible to suffer from investor’s whiplash trying to make sense of these fluctuations.
Typically the price of gold is marked to the value of currency, but we”ve recently seen gold breaking with currency indexes, and outperforming both the dollar and the Euro. This is important to note, as it would appear that gold is once again becoming a global standard for fiscal security. The price of gold may seem prohibitive, and thus a likely reflection of a price bubble, but consider that its five-year performance has seen an increase in value of over 166%. During the same phase, the stock market has dramatically under performed, losing 2.0% of its value.(1) And remember, even when gold experienced what looked like a correction in October 2011, its value was still outperforming the stock market.
Which is more expensive: The steep entry into solid, unperturbed growth or the sudden disappearance of years worth of investments?