Investing in gold, silver, platinum, or palladium can diversify your portfolio. They are highly advisable to safeguard your portfolio against a sudden drop in the stock market. If all of your assets are invested in the stock market and the stock market plummets right before you retire, you may be overwhelmed with financial distress.

However, if some of your assets are precious metals, you will be less adversely affected.

It is also simple to sell off precious metals when you want to liquidate. Since they are so popular, buyers are not hard to find.  Compared to real estate, for example, precious metals are faster and easier to sell.

Diversifying your investment portfolio with gold, silver, platinum, and palladium is a smart idea. Precious metals typically maintain their value compared the volatile stock market. Because they are in limited supply on Earth, they are highly sought after and difficult to find.

The best time to buy gold is when it’s at its lowest price.  Typically speaking, the gold prices rise just as the stock market takes a dip.  The ideal time to purchase gold is right before stock market crash.

Learning and paying attention to the market signs can be a huge pay off.  For example, learning that the national reserve bank will soon be printing more money is a sign that the price of gold is going to increase.  That’s because when the national currency drops, the price of gold increases.

A Gold IRA is a type of self-directed retirement account that allows individuals to invest in gold, silver, and another precious metals with the same tax benefits as traditional IRAs.  Gold IRAs may have higher fees than traditional IRAs and also require additional reporting due to complexity of the investment.

Instead of holding stocks and bond, like in a traditional IRA, a Gold IRA holds physical gold bars and bullion coins.  A Gold IRA allows you to diversify your portfolio against stock market crashes and volatile economic situations.

IRS loophole, section 408 (m)(s) allows individuals to open up a self-directed IRA to hold gold and precious metals in a tax advantage account.  This allows tax savings from investments that not found on wall street, such as stocks, bonds, and mutual funds.

The percentage of gold and/or precious metals held in one’s account will vary from person to person depending on level of risk and current age.  If you’re close to retirement, it’s a better idea to avoid more risky investments.  If you are many years away from retirement, a higher level of risk could be more acceptable.

Only a percentage of gold and precious metals make up one’s portfolio since precious metals are use to hedge inflation and economic downturn.  Many choose to hold 20%-30% in precious metals, while others feel comfortable holding up to 50%.

In order to open a Gold IRA, you must use a custodian.  There are several different companies to choose from.  The custodian handles all of the administrative paperwork and also stores the gold and precious metals on the account holder’s behalf. Physical possession of gold is not allowed for Gold IRAs.  It must be stored in an IRS approved storage vault.