There is an old adage that goes, “You never see the train that hits you”. So the strategy you need is to be aware of risks and avoid trains. The fact is that bad things happen and most often they happen when you least expect them.
When it comes to your retirement savings, such as an IRA or 401K, a setback in your investment portfolio can change your life and your plans. Reducing your risk exposure is the major reason investment experts advise you to diversify your investments. I know that many people view some investments as bullet proof, but history has proven that is not the case. Just ask people who were invested in banks and brokerage in 2008, invested in bonds in 2009 and 2010 or put their money with an investment guru like Bernie Madoff or other fraudsters who lost big money overnight. Take a look at the variety of investment scams so you can be aware of all the ways fraudsters can steal your money at FINRA (Financial Investment Regulatory Authority).
Putting all the scam warning aside, putting your retirement savings under the mattress or in a safe is not a good strategy either. If inflation sets in, the money you have buys less and that means you will have lost value and hiding money under the mattress certainly negates the possibility of any growth.
When you are diversifying your retirement savings, make sure you consider a full range of investments. When in stocks or bonds, consider stock or bond portfolios. Take a look at the fund history and fees to make sure you are selecting wisely. Certainly, past history is no guarantee of future gains. The fact is there are no guarantees and you can’t make money without a certain amount of risk. Another diversification strategy is investing in precious metals such as gold in your 401K or IRA.
There are a few considerations when you have an investment in precious metals in your 401K or IRA. First of all you will need to have a custodian hold the gold for you. You cannot hold the gold personally, without taking a distribution. A reputable gold dealer can give you a list of trusted custodians that will hold your gold for you. Take some time and effort to assess the services and fees for a number of custodians to help you select the one that is right for you. Also, consider how much of your 401K or IRA retirement portfolio you want to have in precious metal investments.
After you select a custodian, get the forms from them to transfer money from your 401K or IRA to the custodian. Fill out the forms to begin the process and when the money is transferred you can start buying gold in your retirement portfolio. Be sure to check the rules of your 401K or IRA to determine the type of gold investments allowed so you don’t run into compliance issues.
You can sell the gold, or buy more gold at any time, just like any other investment. Always remember that if you take personal possession of the gold you will need to take a distribution.
Contact a reputable gold dealer to get started on the road to diversifying your 401K or IRA into precious metals.