Gold IRA vs Gold ETF vs Gold Stocks

Investing in Gold Basics

Published: January 19, 2021

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There are different ways to own gold. You can buy gold and keep it in your home or a safe or wherever you may please. You can buy stocks of a mining company. There is also a gold ETF, gold futures, and gold IRA.

So, how is one different from the other?

Gold ETFs are commodity funds that trade like stocks. Although they are made up of assets that are backed by gold, investors don’t actually own the physical commodity.

Instead, they own small quantities of gold-related assets, providing more diversity in their portfolio. Generally, these instruments allow investors to gain exposure to gold via smaller investment positions than what’s achievable through physical investment and futures contracts.

However, what many investors fail to realize is that the price to trade ETFs that track gold may outweigh their convenience.

Gold futures, on the other hand, are contracts that are traded on exchanges. Both parties agree that the buyer will buy the commodity at a predetermined price at a set date in the future. Investors can put their money into the commodity without having to pay in full upfront, so there is some flexibility in when and how the deal is executed.

You can also buy stock of a mining company. You won’t own physical gold, just a share of the gold mining company.

You can also buy physical gold and hold on to it until you need to liquidate it.

A gold IRA, on the other hand, is a self-directed individual retirement account that invests in physical gold as well as in other precious metals.

What do you get by investing in a gold investment retirement account? You are literally turning part of your retirement nest egg into gold.

A gold IRA is a species of an individual retirement account (IRA) that allows investors to own physical gold, silver, platinum, and palladium instead of more-usual assets—such as cash, stocks, and bonds—to which regular IRAs are limited.

That said, which one is the right move for you?

As you may have realized, each gold investment type serves a different purpose. So, the right investment for you depends on your goal.

Do you want to trade? Then buy stocks. Do you want to secure your retirement? Then get a gold IRA. Do you want the security of seeing your gold? Then buy bars or coins.

I know it seems like I am oversimplifying it. Don’t fret. We are here for you. You can call us for a free no-pressure consultation.

Investing in Gold Basics

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