Financial Security—In Your Control
Financial Security—In Your Control
You have insurance that covers almost every aspect of your life: Health insurance. Car insurance. Home insurance. Even life insurance. You hold these in case the “What If?” happens. That’s because your first priority has been—and always will be—to protect the things that matter most. But what if you’re overlooking how you can protect your own financial well-being?
Top Reasons to Own Gold
From gold’s track record of performance and diversification benefits to the fluctuating perceived worth of the U.S. dollar and ongoing geopolitical concerns around the world, there are a number of reasons why individuals are deciding to move a portion of their assets into physical gold.
Gold has maintained an intrinsic worth for thousands of years, making it a unique vehicle for wealth insurance. As the only global currency that has stood the test of time, gold has outlasted every government and paper form of money—making it essentially default-proof. As a long-held form of wealth preservation, purchasing physical gold can protect what you’ve earned and saved throughout the years.
What Experts Are Saying About Gold
“[When] understanding why gold should be part of a financial portfolio, it’s important to recognize that gold is wealth insurance—with a bonus.”
Philip N. Diehl / President, U.S. Money Reserve
35th Director of the U.S. Mint (1994–2000)
“[G]old has a unique role in protecting portfolios…It’s wise to hold some of what central banks can’t create more of.”
Bridgewater Associates, Global hedge fund giant
“Gold has been a stabilizing asset across a variety of economic, market, and policy environments.”
“The structural bull market for gold is not over and will resume…as inflation expectations move higher, the U.S. dollar weakens and [emerging market] retail demand continues to recover.”
The buying power of our paper dollars has drastically dropped over the long term, meaning it takes more dollars to buy the same goods and services. But because gold is traded in U.S. dollars, a decline in the perceived worth of the dollar typically sees an increase in the price of gold. That’s why gold is considered an inflation hedge, and why gold can protect—and even expand—your personal purchasing power in today’s uncertain world.
A diversified portfolio will contain different types of assets and asset classes. Having a mix of assets helps to mitigate the risk associated with a particular asset class. Gold coins can also be assessed based on their rarity and grade in addition to weight, which means what they sell for could be higher than the intrinsic metal price. Because gold coins can have several features affecting their worth, gold bars are considered more straightforward and easier to understand for people who are new to purchasing precious metals.
Different Ways to Own Physical Gold
Buy gold and silver online or over the phone with U.S. Money Reserve, America's Gold Authority® and a trusted distributor of government-issued gold and silver bullion coins, proof coins and bars. We stand behind our products and our client services, with the educational resources and information you need to make an informed buying decision. Learn more about our precious metals products below and call 1-866-646-8465 with any questions. Account Executives are standing by to take care of you.
Gold Bars vs. Gold Coins
Should I buy gold bars or coins? It’s one of the first questions that people ask when they first consider purchasing precious metals. Both are forms of gold that can be a part of your portfolio, but there are some key differences between gold bars vs gold coins.
For investors, one of the most important differences is in valuation. Several factors lead to differences in the perceived worth of gold bars versus gold coins. Generally, the price per ounce is less when purchasing a gold bar. This largely comes down to the fact that gold bars cost less to produce.
Gold coins can also be assessed based on their rarity and grade in addition to weight, which means what they sell for could be higher than the intrinsic metal price. Because gold coins can have several features affecting their worth, gold bars are considered more straightforward and easier to understand for people who are new to purchasing precious metals.
One other consideration is liquidity. Gold coins offer better liquidity than gold bars since you can sell them in smaller amounts.
Bullion vs. Proof vs. Collectible Gold Coins
With gold coins there is a lot of variation that can affect price, availability, and more. Gold coins fall into one of three general categories: gold bullion coins, proof coins and collectible coins.
Gold Bullion Coins
Bullion coins are the simplest of the three in terms of pricing. The price of a bullion coin is based on the weight of the coin and the market worth of gold. This makes bullion coins the most liquid of the three types of gold coins. Bullion coins can range in weight from 1/10-oz to 1 kilo, and they are embossed with different designs.
Gold Proof Coins
Gold proof coins are certified. When a gold coin is certified it means a professional grading service has been used to evaluate the quality and condition. Grading is also important in establishing the population, or number, for a type of gold coin. Gold proof coins are graded on a scale of 1 to 70. The higher the number, the better the condition of the coin. Proof coins are also distinctive for having a shiny, reflective finish.
Collectible Gold Coins
If you’re interested in collectibles with the potential growth as an investment, gold coins may be a good option. Some gold coins are designed to be collectibles with special attributes. Unlike bars, collectible gold coins can have numismatic potential. This means the perceived worth could be higher because of demand, appearance, or rarity.
There are many options for those who are interested in purchasing gold as a way to protect and possibly grow their wealth. Our Gold Information Kit is a fantastic free resource that goes into more detail about the differences between gold bullion coins, proof coins and collectible coins.
Physical Gold IRA
You can purchase and store gold at home or a safe deposit box, but there’s another way you can own gold. A Gold IRA is a type of individual retirement account that allows the account holder to fund the IRA with alternative assets. Because it’s a self-directed IRA, the account holder gets to select the assets, which can include gold, silver, platinum and other precious metals. With a Gold IRA you get tax advantages as long as you follow the IRA guidelines for storing the precious metals, making contributions and withdrawing from the account.
FAQ: Buying Gold
Is gold good for diversification?
Gold is considered a good way to diversify a portfolio. The term portfolio diversification refers to a financial strategy that’s used to stabilize a portfolio and safeguard it from major losses.
A diversified portfolio will contain different types of assets and asset classes. Having a mix of assets helps to mitigate the risk associated with a particular asset class.
Because gold is not tied to the performance of the stock markets, real estate, or currency, it can be an effective way to improve diversification.
Should I buy gold or silver?
Why should I buy gold instead of silver, you may ask. While gold may get more attention, silver is another alternative asset worth considering, especially if you plan to open a Precious Metals IRA. If you don’t mind more risk or have limited resources for purchasing precious metals, silver is a viable option. It’s considered a good entrance point for those who are new to precious metals.
However, silver prices are more volatile since about half of the silver that’s mined is used for industrial purposes. That means industrial demand can impact the overall demand and subsequently the price per ounce of silver. The lower price point of silver also adds to potential pricing volatility because just $1 increase or decrease makes a big difference. But the gold/silver ratio can be a positive if you have limited purchasing power. Throughout the centuries the gold/silver ratio has varied from 12/1 all the way up to 125/1, meaning it takes 12-125 ounces of silver to purchase one ounce of gold. Currently, gold has hovered around $2,000 an ounce while silver is around $24 an ounce.
For some people it isn’t a matter of gold vs silver. Owning both gold and silver, as well as platinum and palladium, is good from a diversification perspective. A well-balanced portfolio will contain a variety of precious metals.
If you’d like to know more about the differences between owning gold and owning silver, give us a call. One of our knowledgeable IRA Account Executives can provide more information and answer your questions.
How Much Gold Should You Own?
How much gold and silver you should consider owning is going to depend on several key factors. You’ll need to decide if owning gold as an asset supports your financial goals. Your acceptable level of risk, time horizon, and portfolio diversity can also influence how much gold a person may want to consider owning.
After reviewing historical data, many experts have stated 5-20% of a portfolio should be comprised of gold and other precious metals. Of that, about 30-70% should be silver.
If you’d like a better understanding of how gold purchases work contact us to speak with an IRA Account Executive who can explain the aspects of balancing asset classes within a portfolio.
What Drives the Gold Market?
It isn’t as volatile as silver, but gold prices fluctuate. The intrinsic worth of gold isn’t directly tied to the price of the dollar, however, the dollar’s standing can influence the price that’s paid, especially if it’s being purchased with other currencies. Other factors that affect the gold market include:
- Market conditions
- Economic conditions
Like any market, the gold market can experience increases and declines. However, when financial market and economic conditions are turbulent, gold typically sees increased demand because it’s often considered a “safe haven” with a proven history of long-term growth. When market and economic conditions are strong, people are often more open to owning asset classes that typically carry more risk.
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