Gold Certificates & Gold ETFs vs Gold IRAs: What’s The Best Investment?

US-gold-certificate

When it comes to investing in gold, there are a number of options available to today’s investor. Once upon a time, the only way to buy gold was to purchase coins and bars. Now, there are more choices than ever. Gold certificates, gold ETFs, and gold IRAs represent three of the most innovative investment choices that are currently available. Not sure which investment vehicle is right for you? Read on to learn more:

What Are Gold Certificates?

Gold certificates are certificates used to indicate ownership of gold, and are held in lieu of storing physical gold. This method of gold investing dates back to 1863, in which the certificates were recognized as United States paper currency. For 70 years, this system provided certificate holders with title to an amount of gold rated at $20.67 per troy ounce. Today, banks are able to issue certificates that are either allocated or unallocated. Though the allocated gold certificates should correlate with specific numbered bars, it is difficult to regulate. On the other hand, unallocated certificates do not guarantee an equal exchange for gold in the case of a run on the gold on deposit at the issuing bank, posing a level of risk.

What Are Gold ETFs?

ETF stands for exchange traded fund. A gold ETF is an exchange traded fund that is backed by gold, and are intended to track the price of gold. ETFs give investors a way to diversify their gold investments, allowing access to numerous gold mining companies. Gold exchange-traded products like ETFs are commonly traded on the major global stock exchanges, and a commission is charged during trades. What’s more, a gold ETF can help protect an investor’s portfolio when the dollar is down. In a well-balanced portfolio, a gold ETF may be used to reduce overall risk. Unlike gold certificates, a gold ETF is never converted into actual gold.

What Are Gold IRAs?

An Individual Retirement Account, or IRA, is something every investor should have. One reason is because IRAs carry incredible tax benefits. Contributions on traditional IRAs are often tax-deductible and IRA earnings can accumulate tax-free in your account until you withdraw the funds upon retirement. A gold IRA is an IRA that holds actual gold rather than assets on paper. For example, a regular IRA might hold stocks, bonds, or mutual funds — all paper-traded investments. With a gold IRA, your investment is in tangible, physical gold that can be easily liquefied. This means that if the U.S. economy tanks and the dollar ends up being worthless, your IRA still has value because of the global value of gold.

Choosing the Best Investment

Deciding where to put your money for the long-term is no easy feat. All investors want to invest in something that is stable and increases in value over time. While all gold can be placed into this category, buying gold bars, coins, or gold certificates doesn’t offer the same tax breaks as a gold IRA. Sure, it may be a great idea to invest in a gold ETF, however, your first step as an investor in this precious metal should be to establish a gold IRA. Not only will you gain the advantages of investing in tangible gold, you’ll get the tax benefits associated with this type of retirement account. Even if you choose to still buy gold certificates or another form of this precious metal investment, you’ll definitely want to reap the rewards of investing in a gold IRA.

Call American Bullion today at 1-800-326-9598 to speak with a Gold IRA expert about converting your retirement account into physical gold and silver to help reducing your risk from Wall Street.

Although the information in this commentary has been obtained from sources believed to be reliable, American Bullion does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice. American Bullion will not be liable for any errors or omissions in this information nor for the availability of this information. All content provided on this blog is for informational purposes only and should not be used to make buy or sell decisions for any type of precious metals.