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Defensive Investing: How to Protect Your Portfolio
As an investor, one of your main objectives is to generate investment returns. However, investing is not without risks; market volatility can...
Portfolio diversification is one of the most crucial elements to help your retirement investments withstand cyclical economic downturns and bearish stock market conditions. Investing in precious metals such as gold, silver, and similar global commodities provides an important hedge against market volatility and rising inflation.
Precious metals provide protection against volatility because they retain their intrinsic value. Since these commodities hold their value regardless of market conditions, they are relatively uncorrelated to more common asset classes such as stocks, bonds, and mutual funds. Retirement investors can sleep soundly knowing the value of their investments in precious metals won’t plummet by half overnight.
Commodities such as gold, silver, and copper historically have been used as forms of currency. These metals and many others also play key roles in a wide range of industrial applications, such as electronic circuitry, electronic and medical devices, construction, wiring, and computer parts.
The Internal Revenue Service allows many different precious metals for SDIRA investments. These include gold, silver, palladium, platinum, and copper, as well as bars produced by approved refineries. Prior to making investments in precious metals, though, retirement investors must complete these three steps:
Before adding precious metals to their portfolios, retirement investors should take into account these five considerations:
Precious metals can be a lucrative investment option that provides increased diversification to your retirement portfolio. They offer stability, intrinsic monetary durability, protection from market fluctuations, and independence from inflation. Like any alternative investment, precious metals aren’t without certain risks. Rocket Dollar can help you set up a precious metals SDIRA as well as provide assurance that your investment choices adhere to IRS regulations.
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