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simple brokerage account is sufficient for investments in silver and gold funds and mining stocks. If you intend to trade futures and options, you must do so. The type of brokerage account you need depends on the type of precious metals investment you want to make. If you intend to trade futures and options, you must confirm that the broker offers these options
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Another way to invest in gold or silver is to get involved through mining company stocks. In theory, if precious metal prices rise, companies that mine these metals would also increase in value, but prices may also depend on how those companies work. You can keep other precious metals such as silver, platinum, and palladium in your gold IRA. For this reason, the terms “silver IRA” or “precious metal IRA” are sometimes
used.
The latter is technically the most accurate description, but “gold IRA” is the term most commonly used to describe this type of investment vehicle. Since it often moves in reverse with the stock market, gold can mitigate losses in recessions and provide security in times of market volatility. With a gold IRA, you can hold physical precious metals while getting the same tax benefits as traditional IRA investments in paper assets such as stocks, bonds, and mutual funds. Gold bars were once considered strategically important for national governments, as some currencies followed a gold standard in which the currency was backed by a physical equivalent of gold and
could in theory be exchanged for gold.
However, it is important to note that the price of gold can and does fall. So it’s best not to invest in the short term. You can fund a precious metals IRA by transferring money to a 401 (k), 403 (b), 457, retirement, or Thrift Savings Plan account. However, the IRS has introduced additional tax reporting and record keeping requirements for gold IRAs due to the more complicated assets they hold. Miners are judged based on the quality of the deposits they study and the feasibility of extracting the metal from the ground. This complex judgment is recalculated every time the market value of
these deposits changes.
Silver bars can be traded at even higher premiums, around 25% or more, although the entry point is significantly lower than gold. Gold and other precious metals form an alternative asset class that is generally regarded as a “safe haven in recessions” and as a hedge against inflation. There are numerous gold and silver funds that investors have access to today. Many of these can be purchased through traditional brokerage accounts. There are several other ways to invest your portfolio in gold and silver, as we’ll explore here.
Physical gold and silver are, of course, the original ways people invested in these popular precious metals. American Gold Eagles, Canadian Maple Leafs and South African Krugerrands are well-known types of gold bars from their respective mints. Most gold IRA companies allow you to choose your account manager, the trust company responsible for managing your IRA, and your depositary company, although some require that you use ones they have a relationship with. If you’re looking for exposure to gold as a financial hedge in a portfolio, an ETF is hard to beat in terms of liquidity and
ease of purchase.
But how can you invest in precious metals such as gold and silver? While assets such as listed stocks have a relatively easy buying process, investing in gold and silver can be a bit more complex given the wide range of ways to buy these precious metals.
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