Solo 401k plan and Precious Metal Investment

Submitted by Dmitriy Fomichenko, founder and president of Sense Financial Services LLC. This article is primarily useful for US and Canada based readers.

After the financial turmoil just a few years ago, many investors are now exploring safer investment options such as real estate and precious metals. Especially for retirement accounts, the more secured the better. This is when Solo 401k plan gains attention as it allows the addition of precious metals, among other assets, into a retirement portfolio.

Gold and silver as Investor’s Safe Haven

Gold, silver and other precious metals are among the longest traded commodities in the history. As with any commodity, they can safeguard against inflation and volatile market trends. In fact, when investors start to lose trust in the stock market or the overall economy, the price of precious metals often increases significantly.

Strategies to invest in Gold and Silver using a Solo 401k plan

Buy-and-hold strategy: With a buy and hold strategy, often investors will add precious metals to the portfolio and leave it there for years. Not only does this help safeguard against inflation, but investors may also gain from long term value appreciation. This strategy requires less monitoring and less effort to keep up with the market trends. Often, investors will start the account and forget about it until they are ready to make withdrawals. Less administrative cost, better security and more time to focus on their main business or commitments elsewhere – these are the main reasons to choose this type of strategy.

Often, other retirement accounts allow only stocks, mutual funds and similar investments. A Solo 401k plan, on the other hand, allows the addition of non-traditional options, among which are precious metals. Investors might not necessarily want to put all their savings into gold and silver, but adding them to the portfolio is a great way to diversify and minimize the risks.

Buy-and-sell strategy: A buy-and-hold requires less work but it is not always the right option for everyone. Perhaps you have less time to prepare for your retirement, or perhaps you want a bigger return. A lot of Solo 401k account holders are heavily invested in precious metals, so they are already keeping track of the market trends and gold price anyway. For this types of investors, often a buy and sell strategy is preferred. With this strategy, investors will monitor the market closely and trade more often when they see profitable opportunities.

A Solo 401k plan with checkbook control is a powerful tool for the buy-and-sell strategy. It offers self directed option, which means investors do not have to wait for custodial approval before making the move. In fact, the account holders act as the trustee and have total control over their retirement funds. Checkbook control also means that transactions can be made as easily as writing a check. Many investors found this flexibility crucial to successfully invest in precious metals and other commodities.

To learn if you are qualified for a Solo 401k plan, or how to add precious metals to your retirement portfolio, request a free consultation with Sense Financial, a leading provider of Self Directed IRA and Solo 401k.

 

About the author: Dmitriy Fomichenko is the founder and president of Sense Financial Services LLC, a boutique financial firm specializing in self-directed retirement accounts with checkbook control. He began his career in financial planning and real estate investing in 2000. He owns multiple investment properties in various states and is a licensed California Real Estate Broker. Over the years, he has instructed hundreds of investment and financial planning seminars and has mentored thousands of investors.

Receive these articles per e-mail

Subscribe for the free weekly newsletter and receive 3 papers about physical precious metals investing