If there is anything that a lot of people got to learn in 2020 is that, nothing is permanent and because of life perpetual impermanence it is always a good idea to plan for the unknown. The old trusted, put your money in the bank for a rainy day does not work anymore. Even the prudent retirement savings we put aside for when we reach out twilight age might not be enough. So, it’s prudent for any investor to think about assets they can invest in to maximize their returns or ensure that their retirement is smoother. So you should combine the two: Gold and self-managed Superannuation funds.
What is a Self-Managed Superannuation Fund?
A self-managed Superannuation fund is a fund where assets are held in trust or managed on behalf of a minimum of four individuals for the purpose of providing retirement benefits in the future. Members of the fund are all trustees of the fund. Members will look at various investment opportunities they can use to maximize returns.
Many investors find themselves considering investing in precious metals like gold. There are distinct advantages to investing in gold self managed super fund. A lot of these advantages cannot be found in most investment asset classes.
What makes owning gold in your SMSF a good idea?
- Gold Is Money
Gold has been used as currency for millennia. It has been a store of value for over 3,000 years. One of the things money is supposed to do is act better than fiat currencies. Gold stores its value better than any currency in the world. The price of this precious metal might fluctuate but its value is timeless. It will not lose it purchasing power.
- Gold Is Tangible
Gold is a physical asset that you can hold in your hand. It is durable, cannot be destroyed by fire or water or deteriorate over time. Unlike some commodities, you don’t have to feed or maintain gld. Since gold is rare and there is only so much of it available on earth, it has an inherent value you won’t find with other commodities.
Unlike other investment asses, your gold self managed super fund cannot he hacked or erased like brokerage accounts, bank accounts or credit card numbers. In today’s world, it is a good idea to have your wealth outside the digital realm. Gold does not have the same risks that come with other paper assets.
- Gold carries No Counterparty Threat
In its 3,000 years of existence, gold has never been reduced to zero. This is important considering how powerful companies have been brought to their knees when their stocks fell or they were embroiled in corporate scandal. Does anyone remember Enron? Gold can never go bankrupt.
- Gold Is very Liquid
Gold is ideal because you can sell it virtually anywhere in the world. Virtually any gold bullion dealer will recognize and pay the best price possible for gold bullion coins like the Krugerrand or the Canadian Golden Maple leaf or the Australian Kangaroo Coin. Selling gold is much quicker that liquidating stocks and bonds.
- Gold is an excellent hedge against stock market crashes
The price of gold usually goes the opposite direction to the price of shares on the stock market. When the stock market is performing badly, gold tends to gain from this. It is a much sought after haven and a defensive tool against financial crises. This is important to a superannuation fund trustee who wants the assurance that his/ her money will be available when retirement actually rolls by.
