Home Business Insights & Advice Gold IRA investment risks: What you need to know

Gold IRA investment risks: What you need to know

by Sarah Dunsby
2nd Feb 23 12:27 pm

Investing in gold is often talked about as one of the safest, yet still lucrative, investments out there. You can also use a gold IRA to save in gold, or gold linked investments on a tax-deferred basis.

Gold has always been associated with the idea of security, value, and wealth, whether through scenes in classic movies like “The Italian Job” or just by looking around us at family heirlooms and other valuable items. There is a good reason for this, gold always has value.

However, with all investments, there are risks and disadvantages involved when it comes to investing in gold, regardless if you use the IRA structure, or not. Understanding these risks is essential for anyone planning to invest in gold as it might save them headaches in the future and make better decisions.

If you’re looking to invest some of your retirement into precious metals, then you should take advice from a finance expert such as Greg Lorenzo who has compile a list of Top-rated gold IRA firms.

Don’t worry, gold is still a great investment tool and opportunity, you just need to know what to expect. Let’s take a look at some of the disadvantages you should consider before putting your money into a gold IRA.

Returns on gold

Gold returns may lag other investment classes. Any returns you make on your gold will depend entirely on price appreciation. While gold’s value tends to increase in the long term, the fact that it is not as volatile as other assets also means that its appreciation tends to be less dramatic than that of, let’s say, tech stocks over the past decade.

Because gold isn’t as volatile as hedge-fund darling investments, it is called a safe haven asset. If you are looking to see high returns, gold might not be the best asset for you to invest in. Of course, if the currency you measure your gold’s value in sees a crisis, the appreciation of the gold will look like a rocket ship going into orbit!

The logistics involved

The physical nature of gold means that there are a lot of things you have to take into account when investing in it. Gold needs to be purchased, transported, and stored. As such, you will have to choose how your gold is insured and protected. There are fees involved at every stage of the process, much like buying life insurance.

The less you want to worry about the logistics, the more money you will have to spend on having a third party help you with them. Clearly, this is not how investing in stocks or bonds works, so be aware of how gold needs to be protected. You can also opt for gold ETFs or gold mining stocks, if you don’t want to deal with physical gold.

Gold has a high barrier to entry

As you are unlikely to find someone willing to sell you $10 or $40 worth of gold, investing in physical gold often requires a higher initial investment than other assets. The smallest gold coins still cost a few hundred dollars, so know that you can’t start saving in physical gold with a few spare dollars.

Overall gold is an amazing investment, and gold IRA are the perfect way to save gold for your retirement years. Know the specifics of the gold market, and make the right decisions for your goals.


The above information does not constitute any form of advice or recommendation by London Loves Business and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Appropriate independent advice should be obtained before making any such decision. London Loves Business bears no responsibility for any gains or losses.

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