The price of gold has skyrocketed more than 20% so far this year, bringing the value of a bar of gold up to a million dollars. This may make it a prime time to turn those gold investments into cash because it's often a sign the Federal Reserve will cut interest rates soon.
Some investors see the shiny metal as a way to reliably store value during economic turmoil because gold prices tend to rise whenever interest rates fall. The price of a troy ounce of gold went over $2,500 last week, making a gold bar worth about a cool mil for the first time ever.
A gold bar is approximately 400 ounces, although there is a bit of fluctuation between each bar. Bars of gold are usually traded by central banks and bullion dealers rather than individuals, but there are easy ways for you to invest in the precious metal.
If you want to diversify your investment portfolio, adding gold can be a strategic money move. Learn how to use your 401(k) to invest in gold.
Steal this billionaire wealth-building technique
The ultra-rich have also been investing in art from big names like Picasso and Bansky for centuries. And it's for a good reason: Contemporary art prices have outpaced the S&P 500 by 136% over the last 27 years.
A new company called Masterworks is now allowing everyday investors to get in on this type of previously-exclusive investment. You can buy a small slice of $1-$30 million paintings from iconic artists, all without needing any art expertise.
If you have at least $10k to invest and are ready to explore diversifying beyond stocks and bonds,see what Masterworks has on offer. (Hurry, they often sell out!)
Gold individual retirement account (IRA)
![retirement account IRA form on desk](https://cdn.financebuzz.com/filters:quality(75)/images/2024/04/17/retirement-account-ira-form-on-desk.jpeg)
Consider a self-directed gold IRA if your 401(k) doesn't offer gold investment options. This alternative allows you to take control of your retirement savings by investing in physical gold or other precious metals.
While it offers the security of owning tangible assets, it's essential to weigh the logistics of storage and insurance against the potential benefits, as higher administrative costs may be involved. Remember to consult with a financial advisor to ensure a gold IRA aligns with your retirement goals and risk tolerance.
Want to learn how to build wealth like the 1%? Sign up for Worthy to get ideas and advice delivered to your inbox.
Gold futures and options
![Gold bars on US dollar banknotes](https://cdn.financebuzz.com/filters:quality(75)/images/2024/04/17/gold-bars-on-us-dollar-banknotes.jpeg)
Experienced investors might explore gold futures and options within a self-directed IRA. Gold futures and options allow for speculation on gold price movements without direct ownership of the precious metal.
However, trading in derivatives demands a deep understanding of market dynamics and may not be the best idea for investing beginners. Engage in thorough research and consider seeking guidance from professionals before diving into gold futures and options trading.
Gold mutual funds
![computer keyboard with MUTUAL FUNDS button](https://cdn.financebuzz.com/filters:quality(75)/images/2024/04/17/computer-keyboard-with-mutual-funds-button.jpeg)
Diversify your 401(k) with gold mutual funds, which invest in various gold-related assets like bullion and mining stocks. These funds offer exposure to gold's potential growth while spreading risk across different assets. Plus, they eliminate the need for concerns about storage, insurance, or custodians associated with physical gold ownership.
Keep in mind that mutual funds come with management fees, so evaluate the expense ratios and performance history before making investment decisions.
Get a free stock valued between $5 to $200
Secret: You don't need thousands of dollars to buy thousand-dollar stocks or create a diverse portfolio.
Robinhood offers a method of investing called “fractional shares.” On its own, one share of a single stock could cost a lot of money, making it difficult to diversify. Robinhood allows you to buy pieces of stock instead, so you have the option to build a diverse portfolio quickly.
Let’s say you want to invest $250, as an example.
With that amount, you could build a relatively diverse portfolio with an investment of $50 in a big tech stock, $50 in a retail stock, $50 in an energy stock, $50 in a manufacturing stock, and $50 in a bank.1
Even better news? Add a Robinhood Gold membership, and you’ll get access to 5.00% APY2on your uninvested cash3and the ability to buy and sell stocks 24 hours a day, 5 days a week.
Open and fund a Robinhood account and earn up to $200 in stock
Gold exchange-traded funds (ETFs)
![ETF on virtual screen](https://cdn.financebuzz.com/filters:quality(75)/images/2024/04/17/etf-on-virtual-screen.jpeg)
Opt for a hassle-free approach by investing in gold ETFs through your 401(k), if available. These funds track real-time gold prices and trade similarly to stocks, offering easy management within your retirement account.
With no requirement for physical possession, gold ETFs provide a convenient way to diversify your portfolio without the complications of physical gold. However, be mindful of transaction costs and liquidity when choosing ETFs for your investment strategy.
Gold certificates
![lawyer working in office](https://cdn.financebuzz.com/filters:quality(75)/images/2024/04/17/lawyer-working-in-office.jpeg)
Strike a balance between physical and electronic gold ownership with gold certificates. These represent ownership of gold held by financial institutions, offering convenience and security without the need for physical storage. You won’t own physical gold and you’ll avoid any gold storage fees.
You need to research the credibility of the issuing institution before investing in gold certificates. Inquire about redemption procedures and any associated fees so you make informed decisions about certificate investments.
Gold mining stocks
![trader checking stocks on computer screen](https://cdn.financebuzz.com/filters:quality(75)/images/2024/04/17/trader-checking-stocks-on-computer-screen.jpeg)
Consider adding gold mining stocks to your retirement account for diversification, albeit with added market risk. Unlike physical gold, these stocks are influenced by factors like commodity prices and operational efficiency.
Carefully selecting mining stocks can provide exposure to the gold sector while leveraging the growth potential of successful companies. Remember to diversify your portfolio beyond gold mining stocks to mitigate risk and achieve a balanced investment strategy.
Bottom line
![Gold bars and Financial concept](https://cdn.financebuzz.com/filters:quality(75)/images/2024/04/17/gold-bars-and-financial-concept.jpeg)
As you explore the avenues for buying gold and building wealth within your 401(k), remember to assess each option's benefits, risks, and suitability for your investment objectives.
Whether you opt for physical gold ownership or exposure through financial instruments, strategic planning and professional guidance can help you navigate the complexities of incorporating gold into your retirement portfolio effectively.
Masterworks Benefits
- Invest in art like a millionaire for a relatively low cost
- Art investments have outperformed the S&P 500 by over 131% for 26 years
- Purchase shares of artwork by top artists
- Hedge against inflation and diversify your portfolio
Paid Non-Client Promotion
FinanceBuzz doesn’t invest its money with this provider, but they are our referral partner. We get paid by them only if you click to them from our website and take a qualifying action (for example, opening an account.)