These days, more and more people are starting to notice the red flags surrounding the stock market. As a result, when thinking about retirement, they’re considering opening a gold IRA to hedge against losses in their traditional retirement investments. Today, we’ll talk about how gold acts as a great hedge and why now might be a great time to consider taking part in precious metals investments. So, let’s get right to it.
How Does Gold Protect Against Loss?
Any time a market correction has, tons of people lose tons of money. However it is possible for gold to limit your losses, help you to avoid losses entirely, or even help you realize gains during down times. This happens because of the reactions of major investors in the market.
When the stock market starts to go through a correction, it prompts a major selloff with tons of big time investors getting rid of billions of dollars in stocks. As a result, these investors need to find somewhere to nest their money and they start to look for safe haven investments. One of the most common safe haven investments happens to be precious metals; in particular, gold.
With tons of investors nesting quite a bit of money into gold, the demand for gold rises and the supply of the metal on the market falls. As a result of this, the basic laws of supply and demand come into play; ultimately increasing the price of gold. The increase in the price of gold offsets the losses you experience in the stock market; helping to protect your bottom line.
Why Now Is A Great Time To Look Into Gold
Gold is currently trading at relatively low prices. So, buying now gives you the ability to realize growth. However, that’s not the only reason gold is a good idea in today’s market. The reality is that there are several major issues plaguing the market’s ability to continue growing at the rate we’ve seen.
First and foremost, one of the most recent issues we’ve seen is the oil industry as a whole. Over the past few months, oil prices have been falling dramatically. As a matter of fact, the fall has been so substantial that many countries simply can’t afford to produce oil at the low price it’s currently being sold for; the United States is one of those countries. If oil prices continue to fall, companies could close and unemployment spikes could ensue; prompting a sell off.
The sad news is that oil isn’t the only issue. We’re also seeing major issues revolving around the Eurozone economy, the Russia/Ukraine conflict, terrorism in the Middle East, and more. The simple reality is that the geopolitical and economic climate seems a bit grim around the world today; causing major concerns for investors.
With everything that we’re seeing around the globe today, it’s hard to discount the possibility of a market correction in the near future. By investing in gold and other precious metals, you can hedge against risk and protect yourself from losses; should something dramatic happen in the market.
I hate to sound like a total rube, but, what the heck. Are you talking about investing in gold in the stock market? Or buying gold and stashing it somewhere? I’ve heard of both. Apparently a lot of people are doing the latter.
It would be real difficult to hold “real gold” in an IRA. I am guessing that you would have to have a self directed IRA and have a third party custodian or trustee of the IRA. You would not be able to actually have possession of it. The logistics of this would probably be cost restrictive.