Diversify Your American Retirement Account With Gold

If you are a smart investor in the United States, you should take full advantage of the US government's Individual Retirement Account Program. The great thing about the IRA is that you can save money on your current taxes by diverting some of your current income into an individual retirement account. You don't completely dodge taxes, however.

You still have to pay taxes when you pull money out of your IRA account once you reach a certain age. The great thing about all of these is that your employer often matches your individual retirement account so you'll not only save money on your personal taxes, but you actually increase the value of your retirement account by having your employer match that.

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With that said, an IRA is not a slam dunk. Simply dumping money into an IRA doesn't protect you, why? If you don't invest that money, your money will rot away. Serious talk. Why? Inflation. For each and every year that passes, the amounts of goods and services of every single money you have in the bank decreases. Eventually, it will reach a point where your saved money will not buy anything at all. That's how nasty inflation can be. This is why if you are smart, you have to invest that money.

At the very least, you have to invest it in such a way that you keep pace with inflation. Your individual retirement account is not immune from inflation as well. You have to invest that money in investment instruments that go up in value with time. One of the most common investment strategies for IRA holders is investing in stocks. Historically, US equities have increased in value dramatically over time. In fact, if you draw a time line long enough, US stocks have appreciated in value by an average rate of 19% – that's a very healthy weight of return.

In many cases, if you invest in individual stocks, you can double, triple or even quadruple your money if you wait long enough. With all that said, however, in shorter time frames, the stock market can crash. This is precisely why it's important to diversify your different retirement account portfolio; you can't just park it all with stocks and you can't just park it all in bonds. One of the best ways to diversify your portfolio is with gold.

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Gold protects you doing economic meltdowns

When the stock market goes up, it's too tempting to think that it can only go in one direction. After all, when you see your money double or even triple, you can fall into a full sense of security. You might mistakenly believe that the stock market can only keep going up. If you look at the historical record of any stock market, not just Wall Street, you can quickly see that stock markets often crashes like the great stock market pressure in 1929 and 2008. We're talking in almost a decade by decade basis.

There is at least one time in any given decade when the stock market crashes heavily, we're taking a piece of 25% correction. Unfortunately, if your retirement funds are all invested in stocks, it can take decades for your holding to recover their value. To protect against this situation, you should diversify your individual retirement account with gold. By parking enough of the money into gold, you can position yourself to actually break even when the stock market crashes.

If you are diversified well enough into gold, you can actually gain all the luxury selling all your stock holdings when the market tanks. You can then liquidate your gold and still have the same amount of money you invested in your IRA in the first place. Alternatively, you can benefit from stock market crashes when you diversify your individual retirement account with gold.

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Gold can help you take advantage of stock market crashes

Most people don't realize that if you diversify the large chunk of your individual retirement account into gold, you can actually sell your gold holding so you can have enough dollars to buy previously high flying stock at depressed prices. When you do this, you basically lock in at a rock bottom price and you only need to wait for the stock market to get its bearings back. Make no mistake about it. Regardless of which stock market are you analyzing, whether it's the Tokyo stock market, the Bangkok stock market, Dow Jones stock market or even Wall Street, stock markets recover.

Given enough time, stock markets will go back to their pre-crash levels. For example, in the great crash of 2008, American stocks took a major beating, it went down back close to half. However, it only took 6 years for the stock market to start establishing new records. Make no mistake about it, if you wait long enough, stock markets will recover.

By diversifying your individual retirement account with gold, you can yourself in a position where you can cash out your gold holdings after a stock crash and free up enough cash to buy high quality blue chip stocks and wait for the market to rise again. This is a very powerful strategic investment advantage you get when you diversify your individual retirement account with gold.

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Highly liquid

Other investment assets can protect your money from inflation; I am of course, talking about real estate. Real estate is famous for going up in value when there is a high inflation rate. However, the problem with real estate is that it takes a long time to unload – you have to hire a real estate broker, you have to wait for the proper market conditions that enough buyer for you to unload the price you are looking for.

Sure, you can unload real estate, but be prepared to let go at a short sale. In other words, be prepared to let go of your real estate holdings at a lost. Comparing this with gold, you only need to know the current price of gold and then you can unload that gold quick and easy, very liquid.

For all the foregoing reasons, it's always a good idea to diversify your individual retirement account with gold. Not only do you protect yourself against inflation, but you also protect yourself against a wide range of financial calamities arranging from stock market crashes, economic uncertainty, currency devaluation, and many other adverse economic conditions. Keep the advantages above in mind as you decide whether to diversify your individual retirement account with gold or not.

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