One of the most important financial responsibilities that someone has is properly preparing for retirement. This normally requires saving and investing money for three or four decades, while also relying on being able to receive a strong rate of return on money that is invested.
Historically, most people have relied on investing in the stock market or real estate to prepare for retirement. Unfortunately, over the past few years many people have found that these forms of investments are far more risky than people thought in the past. For those that are looking for a more secure form of investment, which can also hedge against inflation or stock market declines, retirement planning by investing in gold could be a great option.
Investing in Gold
When planning for retirement, investing in gold and other precious metals could provide a number of different advantages. One of the main advantages in investing in gold is that it can help to hedge against the risk of stock market declines. When the stock market crashed during the late 2000's, and most consumers suffered from an incredible recession, people that invested in gold found that they were actually able to gain significant returns on their investments. In fact, during the past few years, the price of an ounce of gold has nearly tripled.
Another advantage of investing in gold is that there is almost no risk of it ever declining to zero. While investing in stocks has huge potential if the company does well, there is clearly a lot of risk that comes within investing in individual businesses. Even a successful business that has years of financial success and strong returns could see a huge diminish in value if they have one poor financial quarter. On the other hand, gold has always been a stable investment as it has often been the backing of various currencies across the world.
While retirement planning by investing in gold is a great way to invest, investors will find that there are many different ways to invest in gold and choosing the right way to invest could be complicated. One of the easiest ways to invest in gold is to invest through mutual funds. There are a variety of different mutual funds that focus on investing in gold and other precious metals, or by including these investments as part of a larger strategy.
A primary advantage of this investment is that you will receive a strong diversification of your investments while only having to invest in one fund. However, it is a good idea to understand exactly how much of the investments are in gold, what the ultimate strategy of the fund is, and what types of fees are involved.
Those that are looking to invest a higher percentage of their investments in gold should consider investing in a gold ETF. A gold ETF is an exchange traded fund that invests in gold by buying gold directly or by investing in companies that invest in gold. These funds are ideal for people that want a high percentage of gold holdings. However, there tend to be high fees with ETFs, which can diminish returns.
Those that are looking to invest directly into gold could invest by purchasing gold bullion. When buying gold bullion, you will be purchasing gold directly. These can come in the form of gold bricks, one ounce chips, or even gold jewelry. In some cases, this could result in having to store and maintain the gold. While this could require you to spend money to store the gold, it is ideal for someone that wants immediate access to the gold if there is an economic collapse.
Above all that has been mentioned, one of the best tax efficient and safest ways to safeguard your investments in to open a gold-backed IRA account.