Posted By Isaac Nuriani
People often ask me, “What’s the best gold IRA account?” Before answering, I have to ask them a question first, “Why do you want a gold IRA?” The answer determines which of the three types of gold IRAs is best for an individual investor.
Let’s look at the pluses and minuses of the two types of gold IRA investments.
Typical IRAs let you invest in ETFs – exchange-traded funds. They’re basically like mutual funds. This is the best gold IRA account if all you care about is trading gold as a commodity, like wheat, steel or pork bellies. It’s not the best account for the security-minded, though.
You pay in with dollars. In return, you’re given a share statement. These are paper promises that represent a certain amount of gold in the fund’s vault somewhere. When you sell your shares (hopefully at a profit), you’ll be paid back in dollars.
You can’t touch, see or redeem this gold. Your investment is entirely on paper – or these days, probably electronic. It’s inexpensive and convenient to trade this way.
But if the market goes south – or a serious crisis occurs – ETFs have many weaknesses. First, ETF accounts are usually “unallocated,” meaning the quantity of gold in your shares doesn't have the same amount of solid gold backing it up, just the promise of an equivalent value.
What’s more, your investment is probably leveraged. It’s an open secret that COMEX gold funds typically have 100:1 leveraging. What that means is that there are 100 ounce shares for every ounce of real, physical gold in the vault. That’s an accepted practice, but if too many people sell at once in a crisis, not everyone can be paid. That’s just math. And as a small investor, you’re not at the head of the line to get your money back.
Another problem is that ETF funds are not usually liable for loss, damage, theft or fraud. That’s common in most of their contracts. So if the gold backing your shares goes missing, is “damaged,” or is stolen, who pays you back? No one.
If you’re interested in securing your savings, especially against a crisis, this is not the best gold IRA account for you.
The second most common type of gold IRA account does let you buy specific, physical gold bars and bullion that you to store in a depository. This is called an “allocated” account. (Some depositories also offer “unallocated” accounts, which are similar to ETFs, only you can’t trade your certificate electronically on the gold markets.)
As long as you’re using a reputable depository, the security is excellent and your gold will likely be insured. (By the way, don’t ever, ever store your gold with a company other than a reputable depository. I can’t tell you how many people have been ripped off by precious metals dealers that sell gold and “store it for the customer,” only to disappear with the gold.)
This is an excellent option for those who want assurance that their gold is housed in a way that provides excellent security.
We pray and hope that the economy as we know it keeps chugging along, good cycles and bad. In that case, we believe an Augusta Gold IRA is a superior choice of investment vehicle as a hedge against inflation, deflation and a weak economy. Plus, you’ll be saving a ton of money on fees.
Gold has intrinsic value. That hasn’t changed in 6,000 years. But if it’s not in your hands and under your control, what is it really worth to you?
Talk to an Augusta Precious Metals IRA expert today by calling 855-242-4121.
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