Common Pitfalls To Investing In Gold And Silver in A Self Directed IRA

Pitfalls To Precious Metals Investing Inside A Self Directed IRA
Investing in gold and silver inside your IRA is a great alternative to investing in traditional investments such as stock and bonds. By investing in gold and silver in your IRA you are buying a physical asset that has real value to it rather than a paper asset. Many of the clients that I buy metals through do not have all the knowledge they need to make an accurate decision on the types of metals they should get. Below are some common pitfalls to avoid:

  1. Research the metals dealer. It is important to make sure that you are buying your metals from a reputable source. The internet is a great tool in determining if a metals dealer is legitimate. You can use a number of different resources including the BBB, complaints on blog sites, google searches on the company, consumer protection websites (ripoffreport.com or pissedconsumer.com)
  2. Beware of Numismatic, semi-numismatic, or collector coins. Collector coins are not allowed inside of an IRA because they are considered “rare”. The only numismatic coins that are allowed are gold and silver US Proof Coins. I would advise against buying these coins because they are more expensive that normal gold and silver coins. There is the same amount of gold and silver content in each coin, the only difference is the proof coins look nicer. With an IRA account, the IRA custodian will be holding the metals so you do not get the benefit of showing off a nice pretty coin.
  3. The confiscation theory. There are metals dealers that will try and sell you a numismatic or rare coin because they tout that the government cannot confiscate those types of metals. Going back to my previous pitfall, rare coins are not allowed in an IRA and I recommend that clients do not buy proof coins. I could spend an entire article on why I don’t feel that the government will confiscate gold and silver again but even if they chose to I do believe they would add proof coins to the list of confiscatable gold and silver.

There are more pitfalls in investing in gold and silver such as: using leveraged accounts, buying ETF rather than physical gold and silver but these don’t apply with IRA accounts. If you chose to buy metals outside of an IRA I would suggest researching the benefits and disadvantages of using leverage and ETF.

If you are interested in buying gold and silver in your IRA and want to know more about what types of metals I buy and whey feel free to call, email, or comment below.

Author: , Self Directed IRA Professional
1.801.683.9291
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