The U.S. dollar hit a near 3-year high this week. However, that doesn’t mean the economy is fixed and the stock markets will be rising to the occasion. In fact, if you recall a few months prior, President Trump repeatedly tweeted out against a strong dollar.
August 9th – “As your President, one would think that I would be thrilled with our very strong dollar. I am not! The Fed’s high-interest rate level, in comparison to other countries, is keeping the dollar high, making it more difficult for our great manufacturers like Caterpillar, Boeing,…..”
Be on the lookout for the President to do a similar thing here.
The goal of physical gold and silver is to hedge against inflation and US dollar valuation, Gold and silver act inversely to the U.S. Dollar. Meaning today with the dollar being extremely high, you are able to buy gold and silver on sale. But should you?
How much gold and silver you should have and how do you buy it. Purchasing gold and silver independently can be overwhelming – and for good reason. In an industry filled with nuances, knowledge of the precious metal world is essential, you need to work with an expert in the area to do it right. There are different mutual funds and ETF’s that have gold and silver. The advantage of those funds is that it is easier to buy and sell them, but you lose some of the other advantages of owning the coins outright.
If you buy gold and/or silver with your non-qualified savings (aka, not through IRA’s or retirement accounts), you can actually take the physical position of the coins. One of the advantages of that is the fact that gold and silver coins are a non-reportable asset. This means the government does not know you own them, privacy. Taxes become a non-issue until you sell.
You can use IRA money to buy gold and silver but then you have to store it in a vault, you cannot take the position of it.
Another advantage as mentioned above is the hedge against inflation. Gold and silver values can increase even in times where the US dollar decreases in value, this gives you an un-correlated asset and better diversity.
While it is liquidity with gold and silver coins, you can always sell them or even use them to make certain purchases – I know a guy who bought his last car with silver coins! However, I wouldn’t recommend you buy them for a short term investment. The advantages of gold and silver really make it a long term investment.
For those close to retirement, first, be sure that you have a retirement income plan in place and then you can decide if buying gold and silver is right for you.