Gold and silver have long been recognized as valuable. In
the last 5000 years gold is the only form of money that has never failed. That
alone should tell you why investors flock to precious metals in time of crisis.
Both gold and silver are two of the safest investments you could ever make.
They also provide you with the best opportunity to increase your wealth.
If you are considering investing in gold and silver, here
are 3 things you should know before you take the plunge:
#1 –
Precious Metals Can Protect You From Inflation and Deflation
Both gold and silver can serve as hedges against inflation
and deflation. Because of this, there are some experts who believe gold is an
asset everyone should invest in. Andrew Carrillo, one of the top financial
planners in Miami, advices all of his retiree clients to have at least 5% of
their portfolio invested in gold. He himself has 50% of his total investment
assets in gold.
And as he so eloquently stated, it’s not running out of
money that's the biggest risk when you get ready to retire. Instead it’s
running out of purchasing power due to inflation or deflation. Gold and silver
can protect you from both.
#2 –
Precious Metals Do Not Generate Income
This is one of the main reasons other experts advise against
investing in gold and silver. Unlike most investments, precious metals do not
generate income. The purpose of investing is to generate an income. This is
especially true when you are nearing retirement.
In some cases you may be better off investing in dividend
paying stocks or high quality bonds instead of gold and silver. Generally
speaking stocks will appreciate over an extended period of time and are fully
capable of dealing with inflation.
#3 –
High Taxes
This is yet another reason you may want to reconsider
investing in gold and silver. The government views gold as a collectible.
Because of this you will be taxed as high as 28 percent on any profits you make
as a result of selling your gold. When you sale your stocks, you are only taxed
as much as 15 percent. That's a big difference.
When it comes to investing in gold and silver, the key is to
focus on diversification. You should never put all of your eggs in one basket.
You should also avoid gold collectibles or coin products that are considered
rare. If you are serious about investing, buy bullion.
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