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Anonymous
Anonymous asked in Business & FinanceInvesting · 12 months ago

How risky would opening an IRA that utilizes precious metals as opposed to paper dollar be?

I'm in my early twenties exploring retirement plan options. I collect precious metal coins and bars and sell them for profit, but have never looked into an IRA that utilizes precious metals for money rather than paper money. Obviously the value of precious metals can drop and rise, but paper money can also decrease in value over time depending on the economy.

I'm actually looking for opinions and what others think about a retirement plan that uses precious metals instead of paper money. So would you feel that having $500,000 in precious metals by the age of 35 hold up better when looking 60 years down the road in life and that amount possibly doubling in the scenario that the demand for precious metals increased? Or should I just keep it simple and focus on paper money?

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  • 12 months ago

    Unless your a dealer, precious metals are a hedge against inflation to protect an existing portfolio from hyper inflation. If you don't have an IRA with Stocks and Bonds there is no reason to be doing one with precious metals as you have no portfolio to protect. The idea of precious metals is you actually hope they DON'T do well, then the economy is likely running smoothly and your investments are humming along, but you have them as insurance.

    Source(s): Been doing this for over 40 years.
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  • 12 months ago

    Very risky. Commodity futures are nothing but gambling.

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  • 12 months ago

    I think you are confusing money with value. Simply holding onto paper dollars isnt a wise investment strategy, but using those paper dollars (or whatever) to buy something (whether shares, bonds, metals, etc) of value is a different discussion.

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  • Judy
    Lv 7
    12 months ago

    Long term I'd expect higher appreciation in the stock market.

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  • Amy
    Lv 7
    12 months ago

    I don't understand why you think "paper money" is the alternative here. An IRA usually invests in stocks and bonds.

    I would expect precious metals to have roughly constant value. They don't generate any income, but they don't lose value either. Demand for industrial uses might increase with population, but demand for decorative uses might decrease as cheaper alternatives develop.

    Holding value makes rare metals a better long-term investment than paper money, which inexorably loses value due to inflation. But instead you could invest in stocks, bonds, or real estate to actually gain value.

    • Richard
      Lv 7
      12 months agoReport

      I wouldn't do it, but it is completely legal to "invest" in precious metals for an IRA.

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  • 12 months ago

    Doubling in 60 years isn't a very good return. Even 2% per year more than triples in 60 years.

    And it doesn't always increase. It can go down it value.

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  • Pearl
    Lv 7
    12 months ago

    i would just try it and see and then you'll know

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  • 12 months ago

    Not if you know what you’re doing. You still have to cash it at some point.

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