Should I Put Gold In My IRA?

According to financial experts, the short answer to this question is "yes".

With the way the markets and our IRAs have performed lately, many people are rightly asking if it is possible and a good idea to consider IRA gold in our investment mix.

The Taxpayer Relief Act of 1997 allowed us to put gold and other precious metals into our IRA and 401(k) accounts and the people who took advantage of this have reaped the benefits while the traditional investments--stocks and bonds--have languished. The question now is "what does the future hold for gold".

Past history
History has shown us that gold is perhaps the best 'crisis commodity' which does well when there is uncertainty in the world, whether economic or political--wars, economic instability and high cost of resources. This is exactly the environment in which stocks and bonds perform their worst. So if we were of the opinion that this uncertainty is going to continue or get worse, we should certainly consider gold for what is perhaps our largest investment pool--our IRA and/or 401(k).

Future outlook
Unfortunately for us, todays trends point to a negative outlook for the foreseeable future. The world is changing with emerging countries like China and India demanding their share of the world's resources for their people. This will ensure a continued increase in the demand for oil, gas and industrial metals which in turn will raise inflation. The process is likely to continue for decades and will increase the demand for gold and other 'crises commodities' like silver. The rising wealth in emerging countries is adding to the demand for gold and will further impact on its price.

Besides these negative reasons is the time tested opinion of financial planning experts worldwide that have always held that adding commodities like gold to our 'regular' investments will both increase the average return over time as well as reduce the risk in our overall investment mix.

Is it too late to invest in gold?
A legitimate comment that arises now is "the easy money has already been made in gold". In this regard, it is important to realize that even though the price of gold has gone up a lot recently, and that even though we are seeing new 'highs' in the price of gold on a monthly basis any more, it has not reached its inflation adjusted 'highs' of January 21st, 1980 yet. So whichever way we look at it, it seems that adding gold to our IRA is indeed a good idea.
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