Buying physical to diversify your financial portfolio may be a good idea, as the value of physical gold is less likely to be influenced by economical factors and has shown a steady inflation rate throughout history.
Most experts recommend keeping anywhere from 5% to 10% of your investable assets in the form of bullion in order to improve overall performance. Most investors generally keep their gold in their security deposit boxes at the bank; however, this is actually highly advised against. Here's why you should store physical gold assets in non-bank vault storages instead of security deposit boxes in the bank.
Limitations of Security Deposit Boxes in the Bank
Most people are under the misconception their security deposit boxes are probably the safest place for them to store their valuable assets and goods; however, this cannot be further from the truth. While the Federal Deposit Insurance Corporation does offer a $100,000 guarantee for bank accounts. This guarantee does not extend to security deposit boxes. In short, in the event you are the victim of theft or any loss, fire damage or flood damage, you are straight out of luck.
In addition, you do not have access to your security deposit box at all times. The IRS has the ability to freeze and even seize your deposit box if you are under investigation. Your security deposit box is also subject to bank hours and bank holidays. In short, it's not as easily accessibly as you may think. Safety security deposit boxes are subject to bank regulations.
Last but not least, safety security deposit boxes are simply not cost effective. Depending on which bank you are looking into, the annual fees for keeping a safety security deposit box will differ. If you have a lot of bullion, bars or coins that need to be stored, the amount of money you are spending is simply not worth it.
Better Storage Options
Knowing the full risks you are facing when storing physical bullion, bars and coins in a safety security deposit box, it may be time to consider what alternative options are available. Most experts recommend several different alternatives including:
- Keeping the gold in your home. If you choose to keep your assets close to you where they can be easily accessed, choose sunken floor safes instead of above-ground safes. Above-ground safes are easy to detect, and if they are small enough, they can be easily carried away by just two people. Sunken floor safes, on the other hand, are much more discrete and can be easily hidden with a carpet. They are also difficult to remove without the right equipment.
- Choosing bonded metal precious storage facilities (otherwise referred to as non-bank segregated vault storage options) are available both domestically and internationally. These non-bank vaults are independent from bank regulations and offer adequate insurance coverage that will protect any gold you are storing even in the event of a fire, flood or burglary. These depositories are responsible for receiving, storing and shipping the gold at your request. These depositories offer security and can help you reduce shipping costs by simply changing ownership of the gold when it comes time to sell.
Buying gold to diversify your financial portfolio is an excellent idea. Gold has been known as a stable investment, as it will likely inflate with time. Its value is also unaffected by economical factors, and will generally be rather stable. When you are buying gold, consider whether the sellers can recommend a non-bank vault for you, whether it be domestic or international or whether you are more comfortable storing the gold at home. It's best to cross safety security deposit boxes as an option off of your list.
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