Investing In Gold In 2012
So what’s the deal with investing in gold in 2012?
Is now the time to invest in gold?
It seems there are lots of varying predictions about the gold price, the stock market, the economy, the US dollar, and right now, at the time of this post, the presidential election is coming up, the Dow is at 13,157.97, and gold has crept up to $1,671.00 per ounce.
Don’t we all wish we knew where these were heading?
One sentiment that is shared by a lot of forecasters is that the stock market doesn’t seem likely to hold where it’s at. No one wants that to happen, but with the soaring inflation, the real estate market seeming to be treading water, the national conflicts, the questionable status of many world currencies and the unemployment rates amongst other factors, it is not leaving investors with the majority or all of their portfolios invested into Wall Street feeling warm and fuzzy.
Anyone assessing this whole situation, and looking into the best moves with their 401k or IRA is usually led to the idea of investing in commodities such as gold, and even perhaps oil. The initial sentiment that is often illuminated is how gold has held it’s value since the times of the Romans. Then there are those who are uneasy with how it shot up in the past decade, and aren’t quite sure that they see it continuing on that upward trend.
At the same time, some would say, what else do we have for options?
There is continued talk about inflation and world currencies, and this situation doesn’t seem to be improving, and that leads some to even start to speculate about hyperinflation, such as that of Weimar Germany or Argentina.
When one brings gold into this conversation, and looks back at what happens during a hyperinflation, the value and purchasing power of gold at a time such as this is staggering. Some experts present cases in which the current state of affairs is indicating that some of that is possible, and how the price of gold could very likely skyrocket up past $10,000.00 per ounce.
Then some would look back not too long ago where the price of gold dropped to $300 an ounce, and use that as a reason to be skeptical about where the price is headed, and suspect the $1900 per ounce peak it hit not long ago indicates a bubble that is still on it’s downward trend.
These are very linear ways of looking at this, and one aspect that some may not take into account is purchasing power. When taking inflation into account, and doing some calculating, this adds a whole new dimension to the purchasing power of currency and commodities such as gold, as James Turk expresses meticulously in this video.
Some experts present very powerful cases as to why they can see the price of gold shooting through the roof, and this has historically happened in an inversely proportional manner as compared to ‘paper assets’ and other flailing sectors and currencies, sort of like the gopher game in the arcades, where one goes down and another always pops up.
When one takes all into account and tries to calculate which area is best, there aren’t many areas out there that are looking very solid, whichever direction one looks, whether it be oil, real estate or Wall Street.
With as much skepticism as there is around gold, it at present does hold perhaps the strongest case of holding value, the testimony of this being the fact that as all else has failed, appeared or disappeared, such as civilizations, market sectors and currencies, gold has always been of value and had purchasing power, at any time that someone looks back in history.
With the seeming uncertainty of many industries, sectors, currencies, investments and global economies, many have turned towards stocking up on gold, some with a seeming vengeance. On the list of those snatching up gold today are countries such as India and China, huge investors and central banks.
Some use the example of India and China as enough evidence, for those two civilizations have been around for some time, and it is thought that they know what they are doing, and see the writing on the wall so to speak.
There is one thing in all of this that can be pretty much considered an absolute certainty.
Gold will stick around and hold value, and more importantly – purchasing power. Some of the other aforementioned topics, such as industries, countries and currencies aren’t even guaranteed to stick around, if history is any indication. On the other hand, if history is any indication, gold will be staying and be of value with whatever is going on with whichever economies, sectors or civilizations may flourish or become extinct.
Should I Then Invest In Gold?
At this point, and if you are still on the fence and researching investing in gold and aren’t quite certain, and have taken all the above mentioned factors into account, then this decision is up to you. There are a lot of investors and countries that show through their actions along with words that the answer to this question is a huge resounding ‘Yes!’.
One can also do some digging and find some other experts that haven’t warmed up to the idea. For those questioning investing in gold, the question beckons…
‘what is there that you can count on with certainty at present’?
When that question is thought over, and history is taken into account with it’s way of repeating itself, gold holds quite a solid stance for a smart choice. No one would advocate investing only in gold, as diversification is always a sound investment strategy. Though gold does hold a stance of potentially the safest choice for a portion of one’s portfolio, it has a proven track record for thousands of years and there are some that see the potential where gold could even hit $15,000 an ounce.
You may even want to glance over a recent article (New York Reuters) where a return to the gold standard is talked about. It is all up in the air per usual, but there is mention of how, were that to happen, the price of gold would likely shoot up to $10,000 per ounce (according to Capital Economics strategists). Another interesting mention in this article is how Utah recently passed legislation to make gold legal tender.
Here is a quotation from the article that adds another interesting perspective:
“Governments abroad are also renewing their interest in owning gold as part of their reserves due to economic uncertainty. World central banks as a group became net buyers in 2010 after two decades of net sales. Official-sector purchase is on track to rise to a record high this year“, WGC (World Gold Council) said.
It doesn’t seem a very likely occurrence (a return to the gold standard) due to the projected repercussions that were speculated, though they are some points to consider, where political heads are correlating gold to economic woes, and as a last gasper to save a struggling economy.
Investing In Gold
Powerful And Revealing Video On How To Look At Investing In Gold With Some Fascinating Points For You To Consider
Was That Not A Bit Astonishing For You To Think About?
I’ve had a sense about the economy for some time now. Back in 2005 or so I knew what was going to happen with real estate, and to me, the market would follow, which it did. I’m not a financial analyst. I’m pretty good with math, and I mixed in some simple logic.
I can’t believe people couldn’t see it, as I tried to point it out to friends who were swallowing mortgages around the quarter million dollar area, and with a sense of what they were making, I knew it wasn’t possible. One that I have in mind worked in the accounting department, go figure.
It seems that there are some dogmas that get instilled inside people, in spite of logic. I was at the time just calculating what a $100,000 mortgage took to pay off for 30 years. I didn’t like the idea since it would mean paying 2 1/2 times the original balance after 30 years at a 5-6% interest rate.
Without going on, I basically calculated the total costs with everything, including bills, average car payments etc. I came to the realization that you need to earn annually in household income what your home is worth, to live comfortably. I’m not here to debate that, but that is what I calculated, and knew people buying houses for 200k weren’t making that.
The other aspect I realized was that salary rates had not increased for ten years or so (teachers were still making 30k and people think 100k is a lot), where mortgages had doubled or tripled along with other things like gas at least doubling. Logic told me that income levels need to double to keep up with a cost of living that has doubled (teachers would need to make 80k and 100k would now be 200k). Not many shared the same sentiment, and I digress.
Introducing Gold
This brings us to gold. Once again I see something but it’s a far bigger picture, as it involves real estate still, and world currencies, the state of the nation, and there doesn’t seem a way that the situation will improve. Some aspects that we can count on are continued inflation and a shaky stock market that has many people nervous.
In essence, gold historically has performed very well during any one of those single factors. You can look back over historical data to support this. Some are apprehensive seeing how the price has started sliding some, yet there are other factors to take into account than only the price of gold.
You can see what some experts say about gold here in this post .
Here is a very revealing breakdown of gold in contrast with commodities and currencies by an authority in the field that is another real eye opener.
And here is an fantastic breakdown of the economy and some very fascinating historical data that blew my mind. This offers some pretty amazing reasons to think seriously about investing in gold.
I won’t pretend to be a financial expert. I am once again relying on logic, and what my gut tells me. I have researched all of this some, and essentially reported here most of it as I understand it. I think anyone can see a benefit of a gold investment when taking all factors into consideration.
There are a lot of factors involved, though the main one is that it seems things could be bumpy for some time, and gold is one area that has been known to do well during those times. It is also where many very wealthy people and investors have a portion of their investments. Many always do, but particularly times like now. Now let’s go over some basics.
Getting Started Investing In Gold
There are quite a few different ways to invest in gold. There’s times when investing in gold catches on more than others, creating what’s called a ‘bull market’ where the demand increases and generally the price of gold will follow suit. This is a trend an investor can follow in order to buy and sell to make short term returns on their various gold investments.
A popular way to get started investing in gold where the actual price is tracked is gold ETFs. Gold ETFs allow an investment directly tied into the price of gold, and the investor doesn’t need to worry about storage.
These are highly liquid, allowing a fast transaction when the price is at a place where the investor wants to sell off quickly. There are a couple of physical gold backed ETF options for a more direct correlation with the gold price trends.
These are not recommended as an investment for someone who doesn’t understand the stock market. If you are just getting started, bullion is considered the best choice to start your gold investment, as mentioned below.
There are more factors that can affect the price of gold than merely demand, such as supply, and then other slightly more complex factors such as other market sectors, economies etc. These are some areas one will want to learn about if looking at various stock market options for their gold investment.
Another way of investing in gold is with a more long term outlook, as portfolio protection and a hedge against outer influences. When looking into either short term returns, or a long term investment strategy, this should determine the sort of gold investment you opt for. Physical gold is a common long term investment strategy that is suggested by a number of investors.
Perhaps the most accessible physical gold investment would be gold coins, followed by bars which essentially cost more, yet when bought in bulk cost less per ounce. Jewelry is another possibility, yet can be priced quite high for the percentage or purity level of gold contained.
There are a number of classes of gold coins aside what you may think of as ‘regular’ gold coins, such as gold proof sets, collector’s coins and gold bullion. Each has it’s place, and all are reasonable forms of an investment, each preferred by different sorts of individuals, depending on their intention and experience.
There are what you may consider ‘typical’ gold coins which are generally a lower purity of gold, and are priced accordingly. Gold proof sets are typically higher priced, as they have high levels of purity and a collectible element to them, being limited in supply. Gold bullion coins are also essentially high purity and slightly less expensive than proof sets, and are closely valued to the price of gold, and often sold in 1 oz. pieces, making a single coin valued near the gold spot price, and just over as the broker decides along with the spot price.
Collectible coins that are priced on rarity and demand is one other possibility with gold coins, for one with an eye on collecting. The price range of collectible coins is vast, even heading into the millions for a single coin in some cases. In this case it would be recommended to have some knowledge about this, as you clearly want to have a handle on what you have and can expect from a prospective coin, along with your objective in mind.
Then there is the option of gold bars, which are available in different sizes, similar to coins. One thing that is alluring for investors is that they can be slightly less expensive per ounce, which will increase the more you purchase.
These are perhaps the easiest to understand ways for someone looking into investing in gold to get started right away. Bullion has the most direct relationship with the price of gold, which is one element that draws one to invest in gold, and why it is considered one of the best gold investments.
A diversification of gold investments is considered ideal by many, with the emphasis on physical gold. Some investors are happy with that being the extent of their precious metals, with perhaps a hand in silver and other bullion choices, Gold and Silver Eagle Coins being some of the most sought after. Then you can look into ETFs, or perhaps other gold stocks, futures etc. for some diversification if you want to go with some other options. There are also gold accounts available through financial institutions.
Then there is the choice of what you would like to do with your gold physical gold investments. You can either store them at home in a safe, at a financial institution of your choice, or you can look into a gold IRA, where there are certain gold bullion options.
This option is favorable for those who enjoy the tax status of an IRA, and who don’t want to store the gold and have that to worry about. Plus you can select from IRA types such as a Roth or Traditional, and you aren’t limited to physical gold and precious metals, you may add other investments, such as gold stocks and options that aren’t precious metals as well, and you have control over where your investments are placed.
How To Set Up A Gold IRA
Gold IRA
Are you struggling with trying to learn how to set up your gold IRA? Well struggle no further, because that’s exactly what we’re going to show you how to do in this article.
You may want to roll over your current 401(k) and put it into a gold IRA. There have been plenty of people doing this lately with all of the turmoil in the economy and people realize that owning precious metals is a very good way to secure your retirement for your future.
So let’s take a closer look at this process and what it entails. The concept of creating a gold IRA is to add precious metals as a retirement option instead of using the traditional 401(k) model.
Having this option available to you is actually part of what is known as the Tax Payer Relief Act of 1997. The metals that you are allowed to put in your gold IRA are gold, palladium, silver and platinum.
You have to purchase all of these items in the form of either bullion coins or bars. They also need to meet very specific requirements as far as their fineness is concerned. You do not place your rare coins or other collectible items into this particular type of gold IRA.
Have your precious metals broker help you out in this area and they’ll let you know exactly what are your perfect choices for this particular portfolio. The next thing you’re obviously going to have to do is begin the initiation process for your self-directed gold IRA.
This is also something that can be done through your precious metals broker because you may already even have the ability to do this with your current IRA and you might not even know it.
But if you aren’t allowed to, then you’ll have to learn about the specific IRA plans that allow you to add gold to your portfolio and then open one of those.
You’re also going to need to begin the process of rolling over your 401(k) into a gold IRA account. It really isn’t a very difficult process to set up a gold IRA, so don’t worry about that part of it because it will be relatively quick.
It usually only takes between 3 to 5 business days from the time where you first initiated the process. Once this account is open, you then have the privilege of selecting your precious metals and then placing them into your account.
That’s the whole process in a nutshell and it really is this easy.
Gold IRA Investing
Gold IRA Investing
Many investors all over the world are looking into gold IRA investing as they are now becoming interested in precious metals such as gold and silver.
This is because these metals provide great portfolio diversification. They also give investors a hedge against market volatility and inflation.
People who are interested in setting up a gold IRA should think about rolling over their existing 401k.
This has become a popular method of investing in gold as it helps investors plan for a more secure retirement. The first step in the process is finding a precious metals broker who specializes in adding precious metals into a retirement account.
Investors need to shop around in order to make sure they are not being charged overly high fees. Once a broker is hired they will contact the current custodian of the account to check if the investor is able to add physical metals to their current IRA.
Most plans will not allow precious metal investments. Due to this the investor will have to start the 401k rollover process.
The broker will then help the investor find a a custodian who specializes in precious metals. Once the custodian has been selected, the investor will need to complete some paperwork.
This paperwork will ask investors to disclose the amount of gold or other precious metals they will be planning to add into their gold IRA. Investors will also need to list beneficiaries. The entire set-up process will take anywhere from 3 to 5 business days.
When the account has been set up it will be time to select and place precious metals into the IRA account. There are certain guidelines that investors will need to follow when they are doing this.
A precious metal broker who specializes in retirement accounts will be able to tell investors what is acceptable and what is not. Those who are unsure whether or not gold IRA investing is a good investment or not, should seek financial advice.
One of the easiest ways to do this is to speak to an investment adviser at a bank. Most banks provide this advice to their customers for free. The adviser will be able to tell the investor the pros and cons of a gold IRA investment.
It should be noted that the Roth IRA is a stable investment in comparison to other investment types. For example the foreign exchange market is considered to be one of the riskiest investments out there. Gold tends to retain its value regardless of what the economy is doing.
A great way for investors to gain some security in volatile economic times is to look into gold IRA investing.
