One of the most important reasons to convert your retirement into a precious metals IRA is to diversify your retirement savings. This is the key to protecting your life’s work from declining markets and volatility. Over the years, markets have been plagued by economic uncertainties making them risky and volatile. This is where precious metals come in. Putting all your eggs in one basket by investing in paper assets such as bonds, mutual funds and stocks risks your retirement. There are top three reasons why you shoud diversify your retirement portfolio with a precious metals IRA.
Hedge against inflation
When government puts a legal tender on a piece of paper, it suddenly gains value. This is what is referred to as fiat money as it is not backed up by anything of value. This system has a lot of instability issues. If you have a paper money savings account, you are essentially taking a bet that its value will remain basically the same over time. There is nothing further from the truth. Since there is no recognized store of value backing up your money, it is hostage to inflation. Inflation basically occurs when the more money is printed, the fewer goods it can buy. When there is a huge demand as evidenced by the increased supply of money in the economy and there is a low supply of goods and services the money is trying to buy, the price of goods and services go up.
Thanks to the fiat system, governments can print paper money at will and magically give value to the pieces of paper. This is one of the main reasons investors go into previous metals. These metals are hard value assets that have fixed values. They have either been historically used for jewelry or have industrial uses. These two uses form a base value that stands the test of time. When paper currency decreases in value, precious metals tend to retain their value. Having investments in precious metals helps you maintain your purchasing power.
Preservation of wealth
Wealth preservation is a top priority in this extraordinary environment. Precious metals have preserved wealth for thousands of years because unlike paper currencies, bonds and stocks, they are not someone else promise of performance or liability. Although the price of gold has increased, it still buys the same amount of goods and services it did in the 1930s. The dollar’s value has fallen by a factor of 50 so it takes 50 times more paper dollars to buy the same amount of goods that it did in the 1930s.
Projecting into the future, you must ask yourself whether the dollars you have in your account will buy more or less in 20 or 30 years. If you have gold today, it will allow you to buy the same amount of goods and services that your money will buy today or 30 years from now. In other words, precious metals are a form of wealth insurance. People who have long held a percentage of their wealth in precious metals have been served well by the durability of gold through all sorts of political unrest. In a word of change, precious metals are constants.
Precious metals IRA reviews have it that one of the best ways to invest your retirement savings is in precious metals. They are the purest form of money, and the most durable wealth preserving assets in the world. They are not subject to government manipulation and cannot be devalued. You can have much better sleep knowing that your investment can help you achieve your retirement goals and preserve your lifestyle without having to worry about losing your life savings due to economic factors that are beyond your control.
Precious metals have a unique growth potential as they are finite resources. They have provided tremendous returns in the past and many investors believe today’s prices are a bargain given the potential for growth. For most investors precious metals present an attractive alternative to placing money in retirement accounts or low-yielding bonds.
The demand for precious metals is global. In fact, governments and national central banks have bought large amounts of gold in the last 50 years or so. This demand will continue to rise, not only from investors and nations, but also the increasing number of industries that make use of metals in their manufacturing plants.
As demand increases, supply is decreasing. This naturally pushes the value higher over time. Many of the precious metals large deposits have been discovered yet these precious metals continue to be sought after for use in machinery, jewelry, medicine and numerous other applications. It goes without saying what this could mean for the value of precious metals in the future.