By admin on Thursday, January 24th, 2013 | No Comments

With the stock market at its current state of volatility, many investors are looking for alternatives to traditional stocks and bonds for their IRAs. Currently, one of the most appealing alternatives is a precious metals IRA. Investors who want a more stable retirement savings account can create a portfolio that is based partially or completely on precious metals .

There are several different types of precious metals that are allowed in an IRA. They include various types of gold like the Gold American Eagle and the Uncirculated U.S. Buffalo Gold as well as different types of silver. platinum. and palladium. Your financial adviser can steer you toward the right precious metals for your Individual Retirement Account. and they will help you to discover how to invest in these valuable precious metals.

The Advantages of a Precious Metals IRA

Investing in precious metals is more advantageous at certain times than it is at others. Ideally, investors should look at macroeconomic conditions to ascertain whether or not it is the right time to invest in metals like gold. If the investor anticipates a rise in inflation or a destabilizing deflation, they may want to consider investing in metals like gold and silver. Similarly, investing in valuable metals is the right decision during a bear market for stocks and bonds or anytime when there is financial turmoil. When the market is in any of these states, precious metals are the best investment. Precious metals will always increase in value when the market is unstable or when inflation approaches.

How Much of your Portfolio Should Be Devoted to Precious Metals?

The percentage of your portfolio that you allocate toward precious metals is ultimately up to you. Your financial adviser can help to lead you to the right decision for your financial goals as they relate to gold, silver, and other metals. Your investment decision will be predicated on when you are retiring as well as the current state of the market.

In most cases, the closer that you are to retirement, the more conservative your investments should be, and the further away you are from retirement, the more aggressive your investments can be. Your investment decisions will also be impacted by your own personal tolerance for risk. In most cases, gold and other precious metals are the least risky thing in which you can invest. This is particularly true in times of financial turmoil. Generally, the allocation of gold in your portfolio should be up to 3% in a gold bear market and 5% to 10% or more during a gold bull market. These figures may vary for other types of precious metals, and you and your adviser may opt to invest a much larger portion of your portfolio in precious metals.

Are Equities in Mining Companies Better than Owning the Actual Metal?

When you invest in a precious metal IRA, you have the option between investing in mining companies or in the precious metals themselves. There are pros and cons to both of these approaches. By investing in companies themselves, you receive greater leverage as an investor. However, there are exploration companies that produce little gold and seem to have huge appetites for investors’ money. Those types of companies should be avoided. In most cases, Investing in bullion or coins is a safer way to invest in metals than investing in companies that mine.

Ideally, when investing in precious metals, the investor should be confident in the creditworthiness of the financial institution that is holding their metals. Ideally, that institution will not give the investor a certificate or a note. Instead, they will give them their own precious metals in their own segregated vault that can be audited as necessary.

Does Conventional Investment Advice Apply to Precious Metals?

When you are setting up your IRA with precious metals, you will probably get a lot of advice. However, it is important to keep in mind that precious metals is an antiestablishment investment. As such, conventional investment advice does not apply to them. In most cases, the conventional advice that you get from the mainstream financial media and the mainstream brokerage houses is not right when it concerns precious metals. However, you can turn to these sources to track the growth in value of your precious metals. This information can help you to anticipate trends and figure out when to buy and when to sell your investments.

Always Buy More

When investing in metals like silver and gold, you should never settle for too little. In the event of a disaster or a financial catastrophe, gold and other metals will always increase in value. In fact, these metals will increase dramatically in times of financial catastrophe. If you are ready for dramatic rewards, you are should invest in precious metals. Your precious metal IRA will be a safety boat in troubled waters.