401K and IRA Best Investment Strategy for 2014 and 2015

By James Leitz

     

    

If you invest money in a retirement plan on a regular basis the best investment strategy for 2014 and 2015 is an investment strategy that will keep your investment portfolio on track without subjecting you to a lot of risk. Most of the investment options in a typical 401k and many IRA plans are mutual funds. To achieve long-term growth with only moderate risk you need to invest money in both stock funds and bond funds. What's your best strategy for 2014 and beyond?

After 30 good years bond funds will turn sour when interests rates turn around and go up (that's the way bond funds work). Stock funds have returned well over 100% since early 2009. Interest rates are near all-time lows, and an abrupt reversal in rates could cause havoc in both fund categories, resulting in big losses for investors in 401k and IRA plans. It's time to get proactive to protect your retirement assets.

The best investment strategy for average long-term investors traditionally focuses on a mix of stock funds and bond funds. Picking the best stock funds and best bond funds to invest money in from your list of options is a secondary consideration. Concentrate instead on asset allocation and investment strategy. In other words, how do you spread your money across the different options offered and what kind of strategy do you use to make sure you stay in a position that fits your risk profile? We're talking money management here, and we're talking about your financial future.

Let's say that you consider yourself a middle-of-the-road investor. You are willing to accept moderate risk in pursuit of higher than average returns. Wall Street has traditionally suggested that the best investment strategy is to invest money with about 60% in stock funds and 40% in bond funds. To protect yourself against the possibility of heavy losses in the future, why not get more conservative with your asset allocation?

In a 401k plan asset allocation is your responsibility and you must make decisions on two levels. First, for the investment assets you already have in place (your portfolio allocation). Second, for the new money you invest each payday (your contribution allocation). These allocations can both be the same, or they can be different. For example, upon review of your statement you might see that 70% of your portfolio assets are in stock funds, with 30% in bond funds. And you have 50% of your new contributions going to each.

Here's my suggestion for the best investment strategy for cutting your risk while keeping stock and bond funds an integral part of your investment mix. No matter what your portfolio allocation is now, change it so that you have equal amounts invested in these three areas: stock fund(s), bond fund(s), and a safe investment option. If your 401k offers a STABLE ACCOUNT option that pays a decent interest rate, use it as your safe option. If it doesn't, go with the money market fund. Remember, interest rates are extremely low, so money market funds presently pay very little interest. On the other hand, some 401k stable accounts pay higher interest rates than you'll find anywhere else.

For your allocation for new contributions set it up the same way with one-third going into each of the three options. If you have an IRA that you intend to contribute to on a regular basis, have it set up so that money automatically flows from your bank account to your IRA account. Split the existing money in your IRA into the same three areas as above, and set it up so that equal amounts flow into a money market fund, stock fund, and bond fund each month.

The above strategy will not be the best investment strategy vs. the traditional 60%-40% strategy if both stocks and bonds continue their winning ways in 2014 and beyond. You have traded higher growth potential for greater safety. If, on the other hand, interest rates rise significantly and throw a wrench into the stock and bond markets, this investment strategy should work to your advantage.

Let's say that stock funds and/or bond funds decline significantly in value for a couple of years or more before rebounding. My suggested strategy has two primary advantages. First, your losses will be lower. Second, the new money you have flowing into stock funds and bond funds each month or each payday will buy more and more fund shares as fund prices get cheaper. When prices rebound you will break even and start to show a profit sooner because you bought stock funds and bond funds at cheap levels. That's called dollar cost averaging... which is a crucial part of the best investment strategy.

Sometimes the best investment strategy is to take aggressive action - like after a major decline in stock prices. Other times the best strategy is to be more cautious by cutting the risk in your portfolio... while you continue to invest money in stock funds and bond funds. In 2014 and beyond, I believe that caution is your best strategy.

A retired financial planner, author James Leitz has an MBA (finance) and 40 years of investing experience. His complete investing guide for beginners, Invest Informed, teaches how to invest starting with investment basics. Check out his book, INVEST INFORMED at http://www.Amazon.com.

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Investing in Shares and Stocks

By Derrick King

Things That You Might Need to Know Before Investing in Shares and Stocks
There is no doubt whatsoever that investing in shares and stocks is among the best moves that anyone who is in search of wealth can make. Investing in shares basically means that you buy a fraction of a company and you get to earn interest from the share. Stocks are available when a company wants to raise money and they choose to sell part of their stocks to the public over other methods that can be used to raise cash. Before you go to buy stocks of a company, it is important that you be familiar with the background of that particular company, look for their track record and make a decision of the type of investor that you would wish to become.

Use of Software in Buying Shares and Stocks versus Online Purchasing
As an investor, one golden move that you can make is to buy shares and stocks using stock trading software. This is highly recommended especially for those that are taking those final steps in jumping into the world of trading stocks. Although this software helps you in reducing work load involved while buying shares, you still are required to make sound financial decisions based on shares and stocks that you would wish to purchase. When one is about to buy shares, there is a lot of information that you have to do research on plus make the decisions, this work rate might easily discourage you..

Software comes in handy mostly for new beginners. This is because it analyses stocks all over the worlds markets and generates essential market information that you need before you get to decide on where to invest. One good thing about the software is that it gives you updated information and so you are set not to miss out on any chance of making cash. Another way to buy shares is through online share dealing. Although you should not rush to make any decisions before buying shares and stocks, online methods can save you a great deal of time and effort when you set out. Software provides you with relevant information that you need just by a click of the mouse. It also gives you that chance to compare performance of different stock markets all over the world.

Shares and Stocks at the Share Market and the National Stock Exchange
Everyone thinks about making cash effortlessly upon the mention of shares and stocks. This thought might be proved to be true or false at the same instance and this has been proven time and again. As an investor or one to be, it would be wrong for you to only look at the profit angle of this type of investment since a loss is also not all that impossible. How you set your sail is what determines how your wheel of fortune will turn, either in your favor or not. The process of investing in NSE has turned out to be one of the easiest processes with introduction of online trading. All that you have to do is to have an online trading account and then you are free to take part in buying and selling shares in the world over.

It is highly advised that you get yourself a broker who will handle all transactions related with your investing. You also get complete access to complete information from NSE including news updates, losers, gainers or recommended stocks. Success is guaranteed if you get to trade right irrespective of the market that you get to invest in, either it be NSE or BSE. Trading right would generally mean:

- Having enough information about a company or stock market before you set out on investing.
- Having a stock broker.
- Using a sock trading software before you carry out any transaction and make the right decisions.
- Renting shares instead of fully purchasing them when it comes to accompany that has fluctuating market performance.

I hope this gives a little insight into shares and stocks.

Derrick King is an Author and writer for many websites including http://onlinesharedealing.org but reminds you that this article is not to be considered as sound financial advice it is the point of view of the author only. All major financial decision should be verified by an accredited financial advisor. Stay lucky.

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Why You Should Buy Your First Real Estate Investment Property Today

By Ketul A. Kothari

When it comes to real estate, there are plenty of people out there that are unaware of the many tax advantages available for real estate investment properties. One of the most popular ones is that of the 1031-Exchange. For those of you unfamiliar with this, the 1031 Exchange is actually a section within the United States IRS Code which states that certain eligible properties may be exchanged for properties of equal or higher value without having to pay any taxes on the transaction.

This tax treatment of trading properties for larger ones is an absolute god-send for the serial real-estate investor. Imagine having the ability to regularly trade up one investment property for a larger one every time you had the resources to be able to upgrade? Well, that is very well possible thanks to this very important IRS provision! Larger properties mean generally higher rents allowing you to increase your annual cash flow, so it is definitely a good idea to trade up for bigger properties whenever you get a chance.

Other tax advantages for rental property owners include tax deductions on interest expenses, depreciation expenses, repairs, travel expenses, and insurance costs.

Interest Expense:
Any interest expense on a rental property is tax deductible. This means deductions for mortgage interest payments, and interest on credit cards for expenses that were used in a rental capacity.

Depreciation Expense:
As a real estate investor, you have the opportunity to claim depreciation on your property as a deductible expense by deducting a portion of the value of your property over the span of a couple of years. While this tax deduction provides the investor with immediate benefits, this benefit is eventually returned to Uncle Sam when the property is sold. This benefit is lost primarily because depreciation serves to reduce the total cost basis for the property, so any capital gains are taxed from the lowered cost basis. This concept is known as depreciation recapture.

Repairs:
Any repairs on your investment property are a deductible expense in the year that you pay for the repair. This means things like painting rooms, and replacing faulty lighting. Any improvements to the property, on the other hand, are not deductible.

Travel Expenses:
Real Estate owners are eligible for tax deductions every time they have to travel for their rental activity. This deduction could be broken down one of two ways: either as actual expenses (receipts may be required), or the standard mileage deduction (which is currently 56.5 cents per mile for the 2013 fiscal year).

From the above deductions, it should be clear that there are plenty of tax advantages available for real estate investors! If you haven't already, it's definitely a good idea to start claiming all the above deductions you are eligible for. They may very well make a difference between losing money on a property versus earning a profit.

About the Author: Ketul Kothari is an accomplished investor and entrepreneur. He is also the author of several popular business books including Invest Your Way to Riches. Ketul's upcoming book, Presenting Greatness, will reveal the presentation techniques and strategies employed by some of the world's leading presentation gurus. Follow Ketul on Twitter.

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Protecting Your Future by Investing In Gold IRA

By Arto Laakso

    

Investing in gold is considered to be the best investment these days, even suggested by various financial experts of the world. Some people are making gold investment to become wealthy whereas others are investing in gold IRA and buying silver to protect their hard-earned money for future.

Many economists and financial experts are predicting an economic disaster in near future after assessing the international economic condition and particularly the monetary policy of USA.
Economies of most of the countries in this world are facing various issues to retain their strength.

Even USA economy is staggering with $17 trillion debt with Federal deficit of nearly $ 1000 billion. These scary statements of the financial experts had compelled even the billionaires to invest in gold for their safe future.

Reasons to invest in gold

Gold investments are preferred at such an economically scary condition because it has been used as a store of value and a reliable currency since centuries apart. Any currency can be dishonored at such times by over printing the currency but at the time of such inflation gold is the only currency that maintains its value. Your investment since 2001 in paper products like bonds, stocks or mutual funds might have wiped out within no time or might have been influenced at the time of inflation but gold and silver had grown more than 400%.

Gold, the precious yellow metal, has special position for a common person since centuries and is being used as money since not less than 5000 years. The value of gold has increased during all these years whereas several currencies had faces problems in the meantime. On the contrary US dollar is losing its value every day even being a potential currency. If, in 1971, the US paper currency was not backed by gold then it would have lost its potential as currency. The credit potential of the US Government has backed the dollar at such a crucial time. All these facts are sufficient to be confident for investing in gold.

Why to invest in gold now?

Currencies of most of the countries, including USA, are facing financial crisis at present. The reason behind it is that they printed their currency whenever needed without supporting it with gold. When a country prints its currency without backing it with gold then its value decreases in international market. In such situation people lose their confidence on that currency and start avoiding it. It is the starting point of hyperinflation in the economy of the country concerned. Its situation becomes more critical if they print more currency to prove the potential. Though there can be possibilities in hyperinflation but it does not guarantees any certainty. Ultimately you have to return to gold to maintain the worth of your currency. The value of gold increases with the decrease in the worth of any currency even the dollar.

How to invest in gold?

The basic question arises at this point that how to invest in gold? You may know the facts that gold is tangible money which is used all over the world but neither can you manufacture it nor can delete through any computerized programming. It saves you at the time of economic collapse and inflation as a hedge. Though gold investment is considered as one of the most reliable investments but some people have various queries about gold IRA investment for securing their retirement. A review on gold IRA provided in this article may help you in this regard.

A review on gold IRA

E retirement account that holds approved coins and precious metal bullion instead of paper investments is known as Gold IRA. In gold IRA investing your metal is held on your behalf by a third-party. At present IRA approves bars and rounds of all precious metals including gold, silver and platinum, Australian kookaburra coins, Canadian maple leaf coins and American eagle coins for investing in Self Directed Gold Coins IRA after opening a gold IRA account.

Thus, gold IRA investment is the best investment in the present economic condition world over. Gold is considered as the purest form of money and the ultimate asset that can prove its worth in any condition. Neither any government nor any person can devalue its worth.

Gold Ira Investment

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Why Is Dividend Investing So Popular?

By Joe Barbieri

    

There was once a time when people never invested in equities. There was ample interest earned through bonds, bank accounts and Guaranteed Investment Certificates (GICs) such that buying equities was not necessary. As inflation and interest rates went down and stayed low for a long time, people began searching for other ways of creating income. The two most popular methods are rent generated from real estate and dividend investing. Real estate investment involves buying properties and renting them, and will not be discussed further in this write-up. Dividend investing through buying of equities will be explored in this article.

There are some key things to remember when it comes to dividend investments:

Dividends are Not Guaranteed
Most people know that equities and mutual funds are not guaranteed, unless there is a situation where Canadian deposit insurance takes effect. This is generally when institutions which hold your investments go bankrupt. The same thing holds true for mutual funds as for dividends. A company can change its dividend payout or cancel it altogether without a lot of notice. This is generally communicated at shareholders meetings and via media releases. It is true that companies who discard or reduce dividends tend to get bad publicity from the marketplace, thereby discouraging them from doing this, but it still happens. When dividends are cut, it could mean a change in company direction. A possible scenario is when a company decides to invest a lot of idle cash into a new product, a new line of business or another company which requires money to allow it to grow. Rather than pay dividends, the company has now decided to conserve capital and let the profits generate capital gains instead. A second scenario is that the company is not making as much money as it used to, and it cannot afford to pay dividends any longer. A third situation is when a company has a negative surprise occur, like a lawsuit, a change in regulation that adversely affects its business, a merger, a takeover or a natural disaster that causes the company to change its course on dividends. There are also scenarios when dividends increase more than expected, such as unforeseen extra profits, a onetime dividend payout resulting from a takeover deal, a lawsuit victory or a change in regulation favouring the company resulting in a large profit increase. To find out what is going on with a company, read the media reports and decipher what the current situation is.

Dividends May or May Not Keep Up With Inflation
Many companies will increase dividends each year. In some cases, people expect this to happen since it has happened for many years. These increases are designed to keep the income from the dividends steady as the stock price rises, thereby paying more dollars for each share of stock that you own. These larger payouts serve to keep up with inflation and allow your investment to maintain its value over a long period of time. If the share price is stagnant, and the dividend payouts are stagnant, this situation will not keep up with inflation as you would receive the same dollar amounts over many years. As the prices of things go up, you will find that your money will buy fewer and fewer things, resulting in a cash squeeze. This issue is particularly important if the dividends are your only source of income, or if you are living on a fixed sum of money. Many senior citizens and people on fixed government benefits fall into this category. To find out what is happening in this case, observe the dividend payout history for the company you are investing in, and find out if there are predictable increases in payouts. If they are mostly predictable, but there are a few unexpected changes in the trend, find out what happened to the company at those times. These periods will determine how reliable the stock is when paying dividends, and when they are not reliable.

Dividend Yields are Inversely Affected by the Stock Price
The dividend dollar amount received divided by the share price at the time of the dividend payout gives you a percentage called the "dividend yield". This calculation allows you to compare this yield to other investments, like a yield on bonds or a yield on GICs. This yield can also be compared over time to see what range the yield can obtain. Since the price of the stock is the denominator of this calculation; as the stock price goes up, the percentage given to you or the dividend yield would go down. Conversely, as the price of the stock goes down, this dividend yield would go up. If you are investing for steady income and you already own the shares, this calculation would not matter to you unless you want to change investments, or would need a certain amount of principle (money invested) for an alternative to owning dividend stocks. If you are putting new money into dividend stocks, this yield serves as a comparison to tell you if the stock you want to buy is "cheap" (the yield is high) or "expensive" (the yield is low). There are many things that affect the price of the stock, so this yield will fluctuate a lot depending on the stock price at a given time. The dividend payout would not fluctuate much unless there is something unusual going on - as explained in the prior paragraphs.

What About Interest Rates?
Interest rates should be watched carefully when investing in dividend paying stocks. The higher interest rates rise, the more likely it is that dividend stocks will be sold, because someone can buy an alternative, which is bonds or other interest bearing securities. It is like a substitution effect - if one thing becomes really expensive and a cheaper version of that thing comes around, you will buy the cheaper version of that thing instead. In this case, if a dividend stock gives you a 5% income stream, and a bond gives you a 2% income stream, you would likely buy the dividend stock after weighing risks, cost and taxes. Should the bond then give you a 4% income stream due to rising interest rates, this dividend stock does not look as attractive. If the bond then returns a 6% income stream, this would now be a better yield that the dividend paying stock. People would then sell the dividend stock until the price goes down enough that the dividend yield is close to 6%, or an equivalent return after risk, costs and taxes. Since the dividend payout does not change that quickly, the only other way for the markets to balance the two alternatives is to change the price - in this case the price of the dividend stock.

The Mechanics of Dividend Investing
So how do you go about getting these dividends? The traditional way is to open up a trading account with a bank or brokerage firm. The account has to be such that it allows you to buy individual stocks. You can buy these stocks yourself or have someone do it for you. Make sure you ask questions about costs, account access restrictions and taxes before you set up the account. You would buy shares in each individual company. As an example, you would buy 100 shares of Bell Canada Enterprises (the trading symbol is BCE). These shares would cost you $50 per share as an example. If you buy 100 shares, the amount invested would be $5000 plus any fees to buy the shares. Some accounts also have fees to keep the account open, so ask questions upfront before you start buying stock because these fees will reduce the amount of money you are getting out of the whole exercise. Once the shares are in your name, you would be entitled to a dividend payment each quarter. The quarter end date is the company fiscal quarter end date, not necessarily the calendar quarter end dates. If you own the shares, your name or the name of the brokerage account will be registered with the company and when the dividend payment date approaches, the name of the account holding the shares will be scheduled to receive the payment. If you buy shares before this date, you would receive the dividend. You would then see a cash payment in your account where the shares are held. In some cases, you can have the dividends reinvested into more shares of stock instead of cash to make sure you continue to buy more shares instead of doing this yourself. This method is good if you want to grow your stock holding. If you want to use the income, this shouldn't be done because shares would have to be sold periodically to generate cash, which would incur a lot of trading fees as well as headaches trying to time your trades to get the best price. Timing the market is very difficult to do, so it should be avoided unless you have some skill in doing it.

When Should You Not Invest in Dividends?
The answer to this question depends on what your reasons are for buying dividend yielding stocks in the first place, as well as your risk tolerance. If you are only looking for income, and you can get that income through buying bonds, the latter would be a safer bet. If you are very risk averse to losing your money, and a guaranteed alternative investment presents itself to you, the guaranteed alternative should be bought instead. If you prefer dividend income but also like the capital gain that sometimes come with it, you may want to keep your dividend stocks even if other alternatives present themselves to you. If interest rates rise sharply and you take a large loss on your dividend stocks, this may be a turn off on the whole idea of dividend investing. If you love real estate and can create similar income through real estate as opposed to dividend investing, real estate investing is the way to go for you since you are more familiar with how it works.

How to Tie This All Together
Investing in dividends should always be considered along with everything else that is going on in your life, both financial and otherwise. Take note of what you want to achieve with dividend investing, what your options are, and how comfortable you feel about each of the options. The amount of knowledge you have about each alternative should also be considered. The more you know about something, the better you will be at it. If you know little about something, treat it as an experiment and wade in slowly with whatever help can be found until you know a fair amount about it.

Do you want to:
Learn how the world of money really works without the need of a time consuming or expensive course of study
Discuss what you want to achieve according to your horizon
Restructuring your finances to achieve your goals
Advice that is not affiliated with any institution or any product - an independent opinion
If you answered yes to any of these questions, contact me at: Contact me, Joe Barbieri by email at joetheinvestor.today@gmail.com, my web site at http://www.joetheinvestor.ca or by telephone at 647-286-8020 for an independent consultation on what your options are. Note: This article is intended for people who want to learn about the world of finance and how to research for themselves. If you would like to buy or sell investment products, or specific advice on investment products, tax or legal issues, please consult your investment advisor, accountant or legal counsel.

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Explaining Dividend Yield

By Chris Blanchet

 

For many investors, earning income used to be an easy and simple process. You would invest $100,000 on, say January 1 and over the next five years you would earn a steady 8% on that investment. At maturity, you would get your $100,000 back and you would have renegotiate your term deposit rates with your banker. Over the years, the process became marginally more complicated. Rates on term deposits dropped, allowing fewer people to enjoy the lifestyle they had become accustomed to. And so the choice of investment changed as well. Instead of term deposits, investors might have shifted into fairly safe government or corporate bonds. For a slightly higher rate, investors needed to take on a little higher risk. And while bond prices would fluctuate between the day you bought and the day the investment matured, at the maturity date the face value of that bond was repaid to the investor. It was all good.

But as many people know quite well these days, fixed income investments like bonds come with considerably more risk. In periods of increasing rates, those bond prices will drop. And while the face value will be repaid at maturity, there is always the "what if" of needing the investment prior to that maturity date. With liquidity such a big concern for a lot of investors, they have had to look elsewhere. And of course, to add salt to the wound, rates are just not as attractive as they used to be.

This is how dividend paying securities have gained a lot of traction recently. With the expected rate increases in the near future as well a need for liquidity thanks to the current economic state, dividend paying stocks have meant a return to higher income while taking on only marginally greater risk.

Companies like General Electric, most of the big Energy companies, many solid banks both domestic and international, as well as many other blue chip companies will pay income in the form of dividends. This income, as a percentage of the price of the security, is what is known as the dividend yield.

The dividend yield on any given security will fluctuate each time the security trades at a new price. For example, a $3.00 dividend on a $50 stock is a 6% yield; but once that stock goes to $75, that yield drops to 4.5%. In other words, as the security price increases, the yield drops. This is exactly how things work with bonds. And like bonds, the income stream to the investor remains the same.

For example, an investor who bought at $50 will control the same amount of shares regardless of what happens to price. As well, the income will always be 6% of their investment. If they invest $100,000, the income will always be $6,000, even when the security price rises to $75 and the yield drops to 4.5%. So when the stock price increases, the <i>value of the investment</i> will increase on paper. The income remains the same at $6,000.

Essentially, dividend yield matters only when the original investment is made. As the security price increases, the yield will drop, but the investor's income in dollar terms remains the same. The biggest difference with stocks versus bonds is that the investor will have a little more pressure to sell at market prices. But the problem will be how to replace the original income.

So while dividend yield only matters when making the original purchase, comparing one dividend for one stock to another dividend on another stock whenever a change is made in one's portfolio becomes an ongoing concern. And investors needs to stay abreast of these yields, rising or otherwise, so that they know what the "going" rates are.

--> Have you considered Dividend Funds? Find out the Top Dividend Fund Pick by MutualFundSite.org.

Chris has more than 17 years of financial services experience. He currently manages a website about Roll Roofing [http://www.roll-roofing.com/] at Roll-Roofing.com where he discusses different roll roofing alternatives.

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Why Add Gold and Silver to Your IRA Account?

By Josh Holliday

 

    

Adding precious metals to Individual Retirement Accounts (IRA) was made possible by the Tax Payer Relief Act in 1997. This now includes gold, platinum, and silver. As a method to achieve diversification of investment funds, some account holders place gold in their IRAs. As a general rule, when stock prices drop the price of gold rises. This can even out the value of your portfolio in a weak period for the stock market.

Steps to Take:

1. Inquire of your IRA custodian if you have the right type of account you can add gold too. Some plans do not allow this. In which case, you need to start a new silver-gold IRA.

2. Choose a custodian who has a lot of administration experience with gold-silver IRA plans. It is possible to add silver or gold to most types of IRAs, including Roth, traditional, simplified incentive match plans for employees (SIMPLE) and simplified employee pension (SEP) plans.

3. To open a silver-gold IRA account, send the signed paperwork to your new IRA custodian. Usually the charges will also include a storage fee for any silver or gold coins you keep in your account. Your gold has to be stored with an approved depository pursuant to current IRS rules, which has to be in a completely different location than your IRA custodian's location.

4. To initially fund your gold account you just transfer funds from your bank account to your IRA account. If you desire to roll funds over from a 401(k) or company retirement account your custodian can instruct how to do this, it's quite easy and they can accomplish it in one day.

5. You may want to determine if you desire to buy gold mining stocks or silver and gold coins and will have to inform your custodian to purchase them for you from the funds in your account.

Current Tax Rules RE: Precious Metals in IRA Accounts
1. Investments in Collectibles
Collectible coins are transactions prohibited via an IRA account according to the IRS. Purchasing any collectible coins with funds from your IRA is called a distribution of the same amount you used to purchase the coins. The distribution will then be added to your gross income on your tax form by the IRS and penalized 10 percent if you are under age 59 1/2.

2. Minted Coins Exception
The precious metals that are allowable with IRA investments are U.S. minted coins. The coins need to hold a minimum amount of platinum, silver, gold, or palladium metal to qualify. Gold coins need to contain either one-quarter, one-tenth, one-half or a whole one-ounce mixture of gold. Silver, minted as one-ounce coins, designated bullion, are acceptable. Any coins not designated qualified minted investments by IRA regulations need to be bought with funds outside your IRA and held outside of your IRA account to avoid a penalty.

Your IRA Custodian
3. The custodian of your account is the one responsible to the IRS to report the investments held in any IRA account including any distributions or contributions to or from the account. Which investments are allowed for investors by the account custodian is not regulated by the IRS. What the account can or cannot allow is up to each account custodian to decide. It remains extremely important to always remember coins designated precious metal must be bought through a precious metal IRA, frequently called a "gold IRA." Any good account custodian should be able to assist anyone to buy the appropriate investments for their IRA to not get hit with a penalty. You should never buy any precious metal coins through an IRA account not authorized for precious metals. If you make that mistake, it could result in what's called a distribution, which is then taxable & can cause you to lose the protection of your IRA. Be sure to study the IRA rules beforehand. Most investment counselors advocate the use of an IRA account which allows a person to accumulate profits tax-free over time.

We have many articles on related subjects you should read and learn about at Josh's blog at: http://www.financialmoneytrends.com.

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