Many thousands of investors have made the decision over the past year to protect their retirement savings by investing in gold. The yellow metal has been trusted and beloved by investors for centuries for its ability to safeguard wealth and protect investors’ assets. With high-flying stock markets at risk for a crash in the near future, many investors have decided to get their money out of the Wall Street casino.
Many more, however, are trying to eke out every last gain they can before stock markets crash. The risk, however, is that if they remain invested in stock markets too long, they could find themselves on the receiving end of major losses once the downturn begins.
If you’ve been sitting on the fence about buying gold, time is of the essence. There may not be much time left before markets begin to drop. Here are four reasons to buy gold now.
1. Stimulus Spending
It is all but certain that Congress will approve another massive stimulus package. It may even pass two or more stimulus packages in the next few months, possibly making changes to the child tax credit to give extra money to families with children. With the initial package forecast to provide $1.9 trillion in stimulus spending, on top of the trillions the government has already spent over the past year, there is a torrent of money entering the economy.
Stimulus spending has historically been beneficial for the gold price, and this time around shouldn’t be any different. With trillions of dollars of new money entering the financial system, a lot of it will end up being invested in gold, helping to boost the gold price. And as the effects of all that money begin to be felt, more and more investors will likely turn to gold to protect the value of their investments, giving gold a further boost.
One of the effects of this new money being created is inflation. Figures for various money supply measures have shot up tremendously in recent months, growing at exponential rates far outpacing those of any previous recession or economic crisis. The Fed is so determined to boost prices that it is allowing these trillions of dollars of new money to enter the economy completely unchecked.
As with any injection of money into the economy, the effects aren’t always immediately visible. Prices will start to rise slowly, particularly if inflation expectations remain low. But as prices for food, gas, and other staples begin to rise, and as more households begin to feel the pinch, inflation expectations could begin to rise. That could cause more people to begin to consume, stockpiling food, water, toilet paper, and other consumables to protect themselves against rising prices.
Of course, that additional consumption will further drive up prices, causing a feedback loop of ever higher prices. And as long as the federal government continues spending like a drunken sailor and pushing newly created money into economy, there’s no telling when that cycle might end.
Gold has long protected investors against inflation and its effects, and its price growth can often outpace the rate of inflation, particularly during times of acute economic distress. What do you trust more: the ability of gold to maintain the value and purchasing power of your retirement savings, or the ability of Congress to refrain from spending money?
3. Tangible Investment Asset
Gold is also a tangible asset, and that can play a crucial role when it comes to the havoc caused by inflation. To many investors, there is nothing as reassuring as knowing that there is a tangible physical commodity they’ve invested in that they can actually put their hands on. Stocks and bonds are all traded electronically, and even the cash in your bank account is often just a bunch of numbers on a screen. But investing in gold often means buying physical gold coins or bars.
One of the ways you can do that is through a gold IRA, which allows you to invest in gold coins or bars through a tax-advantaged retirement account. If you have a 401(k), IRA, TSP, or similar retirement account, you can even roll over or transfer assets from your existing retirement accounts into a gold IRA, without tax consequences. That allows you to maintain the use of your existing retirement assets, protect them with an investment in physical gold coins or bars, and enjoy the same tax advantages that your current retirement accounts enjoy. And when it comes time to take a distribution, you can take it in cash or in gold.
4. Price Break
Like many investments, time is of the essence. Right now, gold has pulled back somewhat from its all-time highs from last year, giving investors an opportunity to invest in gold again before it takes off in price again. At the beginning of bull markets, many investors may be hesitant to buy, thinking or hoping that prices will drop back again. But investors who failed to invest in gold at the beginning of the last bull market had to wait years before the gold price dropped again to more attractive levels.
The next time stock markets crash, don’t be surprised to see gold shoot up in price, taking out all-time highs and soaring to never before seen levels. With a weakening economy, trillions more dollars of stimulus likely to come, and higher inflation, the stage is being set for a gold bull market. The only question is how long the bull market will last, and if it will ever end.
It’s hard to believe that the federal government will return to fiscal sanity and responsibility anytime within the next decade, let alone the next four years. Looking back 5-10 years from now, you may find that today could end up being the last time you were able to buy gold at prices you thought were reasonable. Don’t let this opportunity pass you by. Contact the experts at Goldco today and protect your retirement savings with gold before it’s too late.
is America's Gold IRA Expert, CEO of Goldco Precious Metals, and holds a position on the Los Angeles board of the Better Business Bureau.
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