May 1, 2023 • 22 mins
Jerry discusses investing in gold and precious metals in your IRA.
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UNKNOWN (00:03):
Thank you.
SPEAKER_01 (00:46):
Your love gives me such a thrill But your love
don't pay my bills I need
SPEAKER_00 (00:55):
money Hey, hello, hello, hello.
This is Jerry and welcome to thePink Money Podcast where we talk
about all things related tomoney from a gay perspective.
And, you know, today I wasdriving and what I...
kept hearing is this commercialthat kept talking about gold.
Buy gold for your IRA.
You can buy precious metals andminerals for your IRA and put
(01:16):
your IRA into gold because it'sa good hedge against inflation.
And all that is good, true,right?
But do you really want to?
That's what I would tend tothink because if you hold...
If you hold something likeactual gold itself, then you got
(01:42):
to decide what you want to dowith it, right?
Meaning, do you want to holdthis gold coin that you bought
forever in a day?
Or, you know, are you buying itjust for an investment purpose
and you're going to, you know,someday sell it, you know,
liquidate it, turn it into cash?
And I guess I'm just saying...
(02:05):
You have to decide why you wantto buy gold, okay?
Because it's nice to have, Isuppose, if you like tangible
assets.
But, you know, it can also be apain in the neck because you got
to put the gold somewhere.
Like, let's say you're safe,either at home or maybe it's in
a deposit box, you know, at thebank.
(02:28):
But regardless, holdingsomething tangible like that Can
be fun, again, if you'recollecting for a particular
purpose or just for the fun ofit.
But would you really want it inyour IRA?
Because, believe it or not, youcan actually hold physical gold
(02:49):
inside of your IRA.
So the IRS says that you canhold certain types of metals
inside of your IRA, like gold,silver, palladium, things like
that.
You can't hold things likeartwork or maybe some, like a
(03:11):
car or something like that.
Those things are not allowed bythe IRS.
Secondly, if you do buy, let'ssay, gold, and you want to hold
it in your IRA, you have to holdit with a custodian.
So that means that you cannothold it at home in your safe.
(03:33):
So if you want to take physicalpossession of any type of
mineral, you know, you want tobuy some silver, you want to buy
some gold, you want to buypalladium, whatever, platinum,
then...
Again, you can just put thatstuff in your home safe.
I wouldn't consider it for myIRA.
(03:53):
Now, if you do decide, hey, Iwant to diversify my portfolio.
I've got a lot of stocks in it.
Maybe I have a few bonds in it.
Maybe I have a 60-40 split in myportfolio, 60% stock, 40% bonds.
That's a typical portfolio for amoderately aggressive person.
(04:16):
But You know, a lot of peoplewill do that kind of mix because
they're looking at thecorrelation between stocks and
bonds, meaning you want thingsthat don't move together in the
market versus things that domove together, like stocks,
whether they're large companies,medium, small, for the most
(04:40):
part, okay?
Those are all going to rise atthe same time.
and bonds, on the other hand,stocks go up, bonds go down, and
again, general terms, then thosetwo are not correlated assets.
So stocks would be, correlatedassets bonds would not be and
(05:01):
that ends a that has a certainamount of diversification right
and we can go on and on and onabout that and the different
types of stocks and bonds etcyou can hold in your portfolio
but again at a high level okayso let's say you have that 60 40
split and you're worried aboutinflation and the toll it's
going to take on your portfolioyou you You could decide, hey,
(05:25):
you know what?
Maybe precious metals, minerals,gold might be a good way for me
to diversify some of myportfolio, right?
So you would not want to putyour entire portfolio into gold,
although some people do, right?
You can.
You know, if you're holding a$250,000 portfolio, let's say,
(05:46):
you could sell all that and youcould buy actual gold, right?
Again, you can't hold it in yoursafe at home, but you could hold
it through your IRA custodian.
So the point is that when you'reholding these physical assets,
you can have someone buy themfor you or you would buy them
(06:08):
for yourself in a self-directedIRA.
Self-directed just means youpick and choose your own
investments versus someone doingit for you.
So self-directed is always goingto be the cheapest way
because...
You're doing all the legwork.
You do all the picking,choosing.
If your portfolio goes up,great.
Good for you.
If it goes down, well, too bad.
(06:29):
Too bad for you.
So you can't blame anybody butyourself.
So again, gold...
it works counter to stocks.
So they are uncorrelated,uncorrelated assets.
And people like that generally,because again, if stocks are
starting to head downward, theywant something that's going to
(06:49):
insulate their portfolio andgold has a tendency to do that.
Now gold, however, can be veryvolatile, as well as all these,
you know, precious metals can bevolatile.
And that means you might seemore fluctuations in that
particular investment, maybemore than you are comfortable
with, but it does fluctuate.
(07:12):
So with that being said, again,you have to determine the level
of risk you're willing to takefor that amount of investment.
Now, generally, they say 25, nomore than 30% of your portfolio
can be invested in preciousmetals and minerals, and maybe
even less than that.
Because again, The more you putinto this asset class, then the
(07:34):
more volatility you're going tosee in your portfolio.
And the more that youconcentrate in this particular
asset class, then the more risk,again, your portfolio is
subjected to overall.
Will you lose all your money?
You know, unlikely because goldin and of itself is not like a
company where the company can gobelly up.
(07:55):
It could go bankrupt and youlose all your investment in that
particular company.
But gold in and of itself is notgoing to go bankrupt.
In fact, I mean, of course, weknow gold's been around forever
and a day.
So it continually trades for allsorts of reasons.
But it's always there, alwaysgoing to be there.
(08:15):
And it is always going to beused.
So if, let's say, again, for ourillustration purposes, you
decide to buy gold inside ofyour IRA, and you have a chunk
of your portfolio, again, let'sjust say, you know, 20%.
20% of your portfolio you'vechosen to invest in gold.
(08:39):
So now you find this IRAcustodian.
And they are well-respected, andyou trust them, and they've been
around, and all that good stuff,not just some fly-by-night
place.
But anyway, so you've got thiscustodian.
You decide you want to buy somegold bars.
(09:00):
bars or bullion.
So that has to be at a certainlevel.
And they would tell you allthis, they would tell you this
is a purity that it has to be ataccording to the IRS standards.
And this is the type of, youknow, gold that you can buy,
etc, etc, because there are someparameters around that.
(09:20):
I won't get into all that.
Again, if you really want tolook at all that cold, a dealer
and you can figure all that out.
But Again, just keeping it at ahigh level.
Once you buy that gold again,then it has to actually be
stored.
And it's stored with thatcustodian.
And that carries a certain cost,right?
Because nobody does nothing forfree.
So you at home with your owngold, Outside of your IRA, it
(09:44):
doesn't cost you anything.
However, that is subjected to acertain level of risk as well,
right?
I mean, it could be stolen.
Someone could come in yourhouse, take your safe, rent out
the door with it, and then allyour gold is gone.
You can always be, you know,someone robs you while you're
carrying that gold.
I've heard of people walking outof the bank after going to their
(10:08):
safety deposit box and pickingup a bunch of gold jewelry, and
they get robbed outside of thebank.
That has happened.
So again, you've lost thatphysical asset.
Hopefully, you have someinsurance on that.
But nevertheless, it's gone.
So inside of your IRA, that'snot going to happen.
(10:29):
However, at some point, you willliquidate the assets inside of
your portfolio, whether they'restocks, bonds, mutual funds,
whatever it is, gold.
At some point, you reach a stagewhere you have to liquidate this
asset.
Now, if it's a Roth IRA, you'renot going to have mandatory
(10:50):
distributions.
But if it's a traditional IRAthat everything in there has
never been taxed before...
Essentially, you've taken a taxdeduction on that.
And I've covered the traditionalIRAs before.
But again, we'll just say thatnothing has been taxed in there
for the most part.
So when you take thedistributions, that's when the
taxes come due.
(11:11):
So in your portfolio, you wouldsell X number of, let's say you
need, I don't know, let's say$2,000.
So you would liquidate$2,000worth of stocks or whatever to
liquidate free up the cash, andthen that cash you actually take
either as a redemption if it's amutual fund, or again, you just
(11:36):
take a distribution out of yourIRA and it goes to your bank
account, okay?
And then you pay taxes at theend of the year when you get
your 1099-R.
So the gold in and of itselfcould be transfer to you in kind
as well but it would have to belet's say whatever that gold bar
(11:57):
is going for because they're notgoing to cut it in half right so
that distribution you would haveto just work with that company
to get something that's close towhatever you're trying to
liquidate So now, you know, ofcourse, gold, it trades at, you
know, wildly different prices.
You know, what it traded for 20years ago, maybe substantially
(12:21):
less versus what it's tradingfor now.
You know, spot prices are alwaysall over the board.
Now, again, in high inflationarytimes, a lot of people flock to
gold.
Because, again, they want toprotect their portfolio.
So, you know, demand is high.
Prices go up.
(12:42):
You could be paying more forthat gold than you want to.
But, hey, if that's your concernand that's what you want to do,
then that's the choice you haveto make.
Now, let's say that, again, youwant to invest in gold.
You don't like the fact that youhave to pay these storage fees
and you have to liquidate itand, you know, all that stuff.
But you like the idea of gold.
(13:03):
Well, you could hold a preciousmetals and minerals fund or a
gold mutual fund.
That's always a possibility.
That's an easy way to diversifyyour portfolio.
Something like a precious metalsand minerals fund would be
generally invest in not only theactual commodity itself, but
(13:25):
they would usually invest indifferent companies within your
portfolio, meaning thesecompanies that mine gold.
They are oftentimes the best waythat the portfolio managers will
choose to cover that entireasset class.
(13:48):
So That's just a common way.
Plus, the total cost ofownership, if you're buying
physical gold, could actually behigher because, again, you have
the trading costs that are partof the component of holding it.
(14:09):
Now, you may not pay a bunch upfront, but you may pay a lot
more when you liquidate it.
It's hard to say.
But you would have to take allthat into account.
So in a mutual fund, you don'thave that kind of carrying
costs, let's say.
You just have the expense ratio.
(14:30):
And that typically is going tobe a higher expense ratio than
your usual stock-based mutualfund.
So let's say it's an S&P 500mutual fund.
You know, the expense ratio onthat is going to be pretty low.
It's probably going to be, youknow, you know, for something
like that, it's going to bereally low because again, in
(14:50):
that type of an index mutualfund, there's not a whole lot
going on.
So the, there's not a lot oftrading that has to take place
and the portfolio managerdoesn't have to go out and do a
lot of research and kick tires.
Now, on the other hand, if youare, are buying a precious
metals and minerals fund, amutual fund that is actively
managed, then yes, um, you cansee your expense ratio go up to
(15:13):
something like 1.2%.
Now, in that case, you're payingmore because there's a lot more
legwork that the portfoliomanager has to do.
He or she, again, has to usuallytravel to these places.
They want to interview thecompanies themselves, see what
their operations are like, seewhat kind of competition that
(15:35):
they have.
see how stable they are, whatkind of management structure
they have, on and on and on.
So there's just a lot more thatgoes to that.
And then again, they have towork on getting the asset
classes right and keeping it ina way that it's not overly
risky.
It takes some risk, but not toomuch risk.
(15:56):
So they just have to make surethat that entire balance is
right.
So that's an easy way to gainsome exposure to precious
resources.
to the precious metals andminerals arena via a mutual
fund, okay?
There's also exchange-tradedfunds, ETFs.
So you could go to themarketplace and you could buy a
(16:18):
gold ETF, like a gold spider.
You could do that.
Those typically, again, havelower costs because you're
buying it like a stock in theopen market, meaning that
particular...
ETF is just like a stock.
Stocks trade generallythroughout the day.
(16:39):
You buy it in the morning andyou sell it in the afternoon,
which you could do, you know,because that's just the
flexibility you have with buyingstock.
You have the same flexibilitywith an ETF.
You could buy in the morning,sell in the afternoon.
So you have trading fees that goalong with that as well.
But, you know, for the mostpart, again, mutual funds only
(17:00):
trade once a day.
So if you decide to sell, Yousell with whatever the NAV, the
net asset value, is going to befor that day.
Generally, that's mutual fundsare priced at 4 p.m.
Eastern at the closing New YorkStock Exchange.
And then you sell at that andyou buy it at that same price as
(17:23):
well.
So they only trade, again, oncea day.
And you may or may not have anykind of fee.
You might have a redemption fee.
It's hard to say.
All that aside, what I'm sayingis you could buy physical
commodities, right?
Gold coins, bullion, et cetera.
Hold it in your IRA with theright type of custodian and pay
(17:47):
the storage costs, et cetera,that go along with that.
You could buy a mutual fund thathas, again, that same similar
type of exposure, maybe broaderdiversification because you're
not buying just the commoditiesitself.
You're getting exposure tocompanies that mine for gold, et
cetera, all the ones that are inthat particular arena, or an
(18:08):
ETF.
You could buy that again at yourleisure and you could decide how
much of your portfolio you wantto put into that.
And you could shave off some,you could buy a little more
again.
That's the flexibility you have.
So my point is that these areoptions that you control, or you
(18:29):
can speak with your financialadvisor, counselor, whomever you
have.
And again, he or she can helpyou construct the right type of
portfolio for you.
And then certainly it would bebased on your level of risk and
risk tolerance, et cetera.
What are your goals are, youknow, and how long you want to
hold this.
So all your portfolio, you don'twant to really let it go forever
(18:54):
and a day and sit there.
You have to typically rebalanceyour portfolio occasionally.
That doesn't mean once aquarter, once a month, you're
probably looking at at leastonce, maybe twice, Once a year,
twice, probably at the most.
That really, again, just dependson you, what's going on, how
actively you want to manage itor keep it in mind.
(19:18):
So that's really my spiel aboutit.
I think that...
It is a good idea to have someexposure to that.
I'm a big fan of mutual fundsbecause, again, they have that
diversification, thatprofessional money management,
and it just takes all theguesswork out of it.
(19:39):
If you might pay a little bitmore, but again, what are you
gaining?
You gain all the benefits with alot less risk overall.
If you want to hold gold in andof itself, you like this Billie
Jean gold coin that is out therein the market, and you're
willing to pay, you know, Idon't know,$5,000 for it.
(19:59):
I'm not sure what it's tradingfor, but let's say it is, then
buy it outside of your IRA.
And put it in your safe and lookat it, you know, whenever you
have the desire, you show it offor whatever.
And, you know, enjoy it thatway.
Because I think that's a far andaway better option to hold a
(20:20):
physical asset like gold.
So that's it for me.
What was I going to say?
Contact me on our social mediapages or through the website.
Okay.
Have a great day.
SPEAKER_01 (20:37):
I can't stand the rain against my window
Thank you.
SPEAKER_01 (00:46):
Your love gives me such a thrill But your love
don't pay my bills I need
SPEAKER_00 (00:55):
money Hey, hello, hello, hello.
This is Jerry and welcome to thePink Money Podcast where we talk
about all things related tomoney from a gay perspective.
And, you know, today I wasdriving and what I...
kept hearing is this commercialthat kept talking about gold.
Buy gold for your IRA.
You can buy precious metals andminerals for your IRA and put
(01:16):
your IRA into gold because it'sa good hedge against inflation.
And all that is good, true,right?
But do you really want to?
That's what I would tend tothink because if you hold...
If you hold something likeactual gold itself, then you got
(01:42):
to decide what you want to dowith it, right?
Meaning, do you want to holdthis gold coin that you bought
forever in a day?
Or, you know, are you buying itjust for an investment purpose
and you're going to, you know,someday sell it, you know,
liquidate it, turn it into cash?
And I guess I'm just saying...
(02:05):
You have to decide why you wantto buy gold, okay?
Because it's nice to have, Isuppose, if you like tangible
assets.
But, you know, it can also be apain in the neck because you got
to put the gold somewhere.
Like, let's say you're safe,either at home or maybe it's in
a deposit box, you know, at thebank.
(02:28):
But regardless, holdingsomething tangible like that Can
be fun, again, if you'recollecting for a particular
purpose or just for the fun ofit.
But would you really want it inyour IRA?
Because, believe it or not, youcan actually hold physical gold
(02:49):
inside of your IRA.
So the IRS says that you canhold certain types of metals
inside of your IRA, like gold,silver, palladium, things like
that.
You can't hold things likeartwork or maybe some, like a
(03:11):
car or something like that.
Those things are not allowed bythe IRS.
Secondly, if you do buy, let'ssay, gold, and you want to hold
it in your IRA, you have to holdit with a custodian.
So that means that you cannothold it at home in your safe.
(03:33):
So if you want to take physicalpossession of any type of
mineral, you know, you want tobuy some silver, you want to buy
some gold, you want to buypalladium, whatever, platinum,
then...
Again, you can just put thatstuff in your home safe.
I wouldn't consider it for myIRA.
(03:53):
Now, if you do decide, hey, Iwant to diversify my portfolio.
I've got a lot of stocks in it.
Maybe I have a few bonds in it.
Maybe I have a 60-40 split in myportfolio, 60% stock, 40% bonds.
That's a typical portfolio for amoderately aggressive person.
(04:16):
But You know, a lot of peoplewill do that kind of mix because
they're looking at thecorrelation between stocks and
bonds, meaning you want thingsthat don't move together in the
market versus things that domove together, like stocks,
whether they're large companies,medium, small, for the most
(04:40):
part, okay?
Those are all going to rise atthe same time.
and bonds, on the other hand,stocks go up, bonds go down, and
again, general terms, then thosetwo are not correlated assets.
So stocks would be, correlatedassets bonds would not be and
(05:01):
that ends a that has a certainamount of diversification right
and we can go on and on and onabout that and the different
types of stocks and bonds etcyou can hold in your portfolio
but again at a high level okayso let's say you have that 60 40
split and you're worried aboutinflation and the toll it's
going to take on your portfolioyou you You could decide, hey,
(05:25):
you know what?
Maybe precious metals, minerals,gold might be a good way for me
to diversify some of myportfolio, right?
So you would not want to putyour entire portfolio into gold,
although some people do, right?
You can.
You know, if you're holding a$250,000 portfolio, let's say,
(05:46):
you could sell all that and youcould buy actual gold, right?
Again, you can't hold it in yoursafe at home, but you could hold
it through your IRA custodian.
So the point is that when you'reholding these physical assets,
you can have someone buy themfor you or you would buy them
(06:08):
for yourself in a self-directedIRA.
Self-directed just means youpick and choose your own
investments versus someone doingit for you.
So self-directed is always goingto be the cheapest way
because...
You're doing all the legwork.
You do all the picking,choosing.
If your portfolio goes up,great.
Good for you.
If it goes down, well, too bad.
(06:29):
Too bad for you.
So you can't blame anybody butyourself.
So again, gold...
it works counter to stocks.
So they are uncorrelated,uncorrelated assets.
And people like that generally,because again, if stocks are
starting to head downward, theywant something that's going to
(06:49):
insulate their portfolio andgold has a tendency to do that.
Now gold, however, can be veryvolatile, as well as all these,
you know, precious metals can bevolatile.
And that means you might seemore fluctuations in that
particular investment, maybemore than you are comfortable
with, but it does fluctuate.
(07:12):
So with that being said, again,you have to determine the level
of risk you're willing to takefor that amount of investment.
Now, generally, they say 25, nomore than 30% of your portfolio
can be invested in preciousmetals and minerals, and maybe
even less than that.
Because again, The more you putinto this asset class, then the
(07:34):
more volatility you're going tosee in your portfolio.
And the more that youconcentrate in this particular
asset class, then the more risk,again, your portfolio is
subjected to overall.
Will you lose all your money?
You know, unlikely because goldin and of itself is not like a
company where the company can gobelly up.
(07:55):
It could go bankrupt and youlose all your investment in that
particular company.
But gold in and of itself is notgoing to go bankrupt.
In fact, I mean, of course, weknow gold's been around forever
and a day.
So it continually trades for allsorts of reasons.
But it's always there, alwaysgoing to be there.
(08:15):
And it is always going to beused.
So if, let's say, again, for ourillustration purposes, you
decide to buy gold inside ofyour IRA, and you have a chunk
of your portfolio, again, let'sjust say, you know, 20%.
20% of your portfolio you'vechosen to invest in gold.
(08:39):
So now you find this IRAcustodian.
And they are well-respected, andyou trust them, and they've been
around, and all that good stuff,not just some fly-by-night
place.
But anyway, so you've got thiscustodian.
You decide you want to buy somegold bars.
(09:00):
bars or bullion.
So that has to be at a certainlevel.
And they would tell you allthis, they would tell you this
is a purity that it has to be ataccording to the IRS standards.
And this is the type of, youknow, gold that you can buy,
etc, etc, because there are someparameters around that.
(09:20):
I won't get into all that.
Again, if you really want tolook at all that cold, a dealer
and you can figure all that out.
But Again, just keeping it at ahigh level.
Once you buy that gold again,then it has to actually be
stored.
And it's stored with thatcustodian.
And that carries a certain cost,right?
Because nobody does nothing forfree.
So you at home with your owngold, Outside of your IRA, it
(09:44):
doesn't cost you anything.
However, that is subjected to acertain level of risk as well,
right?
I mean, it could be stolen.
Someone could come in yourhouse, take your safe, rent out
the door with it, and then allyour gold is gone.
You can always be, you know,someone robs you while you're
carrying that gold.
I've heard of people walking outof the bank after going to their
(10:08):
safety deposit box and pickingup a bunch of gold jewelry, and
they get robbed outside of thebank.
That has happened.
So again, you've lost thatphysical asset.
Hopefully, you have someinsurance on that.
But nevertheless, it's gone.
So inside of your IRA, that'snot going to happen.
(10:29):
However, at some point, you willliquidate the assets inside of
your portfolio, whether they'restocks, bonds, mutual funds,
whatever it is, gold.
At some point, you reach a stagewhere you have to liquidate this
asset.
Now, if it's a Roth IRA, you'renot going to have mandatory
(10:50):
distributions.
But if it's a traditional IRAthat everything in there has
never been taxed before...
Essentially, you've taken a taxdeduction on that.
And I've covered the traditionalIRAs before.
But again, we'll just say thatnothing has been taxed in there
for the most part.
So when you take thedistributions, that's when the
taxes come due.
(11:11):
So in your portfolio, you wouldsell X number of, let's say you
need, I don't know, let's say$2,000.
So you would liquidate$2,000worth of stocks or whatever to
liquidate free up the cash, andthen that cash you actually take
either as a redemption if it's amutual fund, or again, you just
(11:36):
take a distribution out of yourIRA and it goes to your bank
account, okay?
And then you pay taxes at theend of the year when you get
your 1099-R.
So the gold in and of itselfcould be transfer to you in kind
as well but it would have to belet's say whatever that gold bar
(11:57):
is going for because they're notgoing to cut it in half right so
that distribution you would haveto just work with that company
to get something that's close towhatever you're trying to
liquidate So now, you know, ofcourse, gold, it trades at, you
know, wildly different prices.
You know, what it traded for 20years ago, maybe substantially
(12:21):
less versus what it's tradingfor now.
You know, spot prices are alwaysall over the board.
Now, again, in high inflationarytimes, a lot of people flock to
gold.
Because, again, they want toprotect their portfolio.
So, you know, demand is high.
Prices go up.
(12:42):
You could be paying more forthat gold than you want to.
But, hey, if that's your concernand that's what you want to do,
then that's the choice you haveto make.
Now, let's say that, again, youwant to invest in gold.
You don't like the fact that youhave to pay these storage fees
and you have to liquidate itand, you know, all that stuff.
But you like the idea of gold.
(13:03):
Well, you could hold a preciousmetals and minerals fund or a
gold mutual fund.
That's always a possibility.
That's an easy way to diversifyyour portfolio.
Something like a precious metalsand minerals fund would be
generally invest in not only theactual commodity itself, but
(13:25):
they would usually invest indifferent companies within your
portfolio, meaning thesecompanies that mine gold.
They are oftentimes the best waythat the portfolio managers will
choose to cover that entireasset class.
(13:48):
So That's just a common way.
Plus, the total cost ofownership, if you're buying
physical gold, could actually behigher because, again, you have
the trading costs that are partof the component of holding it.
(14:09):
Now, you may not pay a bunch upfront, but you may pay a lot
more when you liquidate it.
It's hard to say.
But you would have to take allthat into account.
So in a mutual fund, you don'thave that kind of carrying
costs, let's say.
You just have the expense ratio.
(14:30):
And that typically is going tobe a higher expense ratio than
your usual stock-based mutualfund.
So let's say it's an S&P 500mutual fund.
You know, the expense ratio onthat is going to be pretty low.
It's probably going to be, youknow, you know, for something
like that, it's going to bereally low because again, in
(14:50):
that type of an index mutualfund, there's not a whole lot
going on.
So the, there's not a lot oftrading that has to take place
and the portfolio managerdoesn't have to go out and do a
lot of research and kick tires.
Now, on the other hand, if youare, are buying a precious
metals and minerals fund, amutual fund that is actively
managed, then yes, um, you cansee your expense ratio go up to
(15:13):
something like 1.2%.
Now, in that case, you're payingmore because there's a lot more
legwork that the portfoliomanager has to do.
He or she, again, has to usuallytravel to these places.
They want to interview thecompanies themselves, see what
their operations are like, seewhat kind of competition that
(15:35):
they have.
see how stable they are, whatkind of management structure
they have, on and on and on.
So there's just a lot more thatgoes to that.
And then again, they have towork on getting the asset
classes right and keeping it ina way that it's not overly
risky.
It takes some risk, but not toomuch risk.
(15:56):
So they just have to make surethat that entire balance is
right.
So that's an easy way to gainsome exposure to precious
resources.
to the precious metals andminerals arena via a mutual
fund, okay?
There's also exchange-tradedfunds, ETFs.
So you could go to themarketplace and you could buy a
(16:18):
gold ETF, like a gold spider.
You could do that.
Those typically, again, havelower costs because you're
buying it like a stock in theopen market, meaning that
particular...
ETF is just like a stock.
Stocks trade generallythroughout the day.
(16:39):
You buy it in the morning andyou sell it in the afternoon,
which you could do, you know,because that's just the
flexibility you have with buyingstock.
You have the same flexibilitywith an ETF.
You could buy in the morning,sell in the afternoon.
So you have trading fees that goalong with that as well.
But, you know, for the mostpart, again, mutual funds only
(17:00):
trade once a day.
So if you decide to sell, Yousell with whatever the NAV, the
net asset value, is going to befor that day.
Generally, that's mutual fundsare priced at 4 p.m.
Eastern at the closing New YorkStock Exchange.
And then you sell at that andyou buy it at that same price as
(17:23):
well.
So they only trade, again, oncea day.
And you may or may not have anykind of fee.
You might have a redemption fee.
It's hard to say.
All that aside, what I'm sayingis you could buy physical
commodities, right?
Gold coins, bullion, et cetera.
Hold it in your IRA with theright type of custodian and pay
(17:47):
the storage costs, et cetera,that go along with that.
You could buy a mutual fund thathas, again, that same similar
type of exposure, maybe broaderdiversification because you're
not buying just the commoditiesitself.
You're getting exposure tocompanies that mine for gold, et
cetera, all the ones that are inthat particular arena, or an
(18:08):
ETF.
You could buy that again at yourleisure and you could decide how
much of your portfolio you wantto put into that.
And you could shave off some,you could buy a little more
again.
That's the flexibility you have.
So my point is that these areoptions that you control, or you
(18:29):
can speak with your financialadvisor, counselor, whomever you
have.
And again, he or she can helpyou construct the right type of
portfolio for you.
And then certainly it would bebased on your level of risk and
risk tolerance, et cetera.
What are your goals are, youknow, and how long you want to
hold this.
So all your portfolio, you don'twant to really let it go forever
(18:54):
and a day and sit there.
You have to typically rebalanceyour portfolio occasionally.
That doesn't mean once aquarter, once a month, you're
probably looking at at leastonce, maybe twice, Once a year,
twice, probably at the most.
That really, again, just dependson you, what's going on, how
actively you want to manage itor keep it in mind.
(19:18):
So that's really my spiel aboutit.
I think that...
It is a good idea to have someexposure to that.
I'm a big fan of mutual fundsbecause, again, they have that
diversification, thatprofessional money management,
and it just takes all theguesswork out of it.
(19:39):
If you might pay a little bitmore, but again, what are you
gaining?
You gain all the benefits with alot less risk overall.
If you want to hold gold in andof itself, you like this Billie
Jean gold coin that is out therein the market, and you're
willing to pay, you know, Idon't know,$5,000 for it.
(19:59):
I'm not sure what it's tradingfor, but let's say it is, then
buy it outside of your IRA.
And put it in your safe and lookat it, you know, whenever you
have the desire, you show it offor whatever.
And, you know, enjoy it thatway.
Because I think that's a far andaway better option to hold a
(20:20):
physical asset like gold.
So that's it for me.
What was I going to say?
Contact me on our social mediapages or through the website.
Okay.
Have a great day.
SPEAKER_01 (20:37):
I can't stand the rain against my window
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