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6 smart ways to buy gold with your 401(k)
Today’s investing landscape offers lots of choices to investors. In addition to traditional investing assets, like stocks and bonds, you have plenty of alternative investing assets to choose from — like Bitcoin, real estate, commodities, precious metals and collectibles — all of which have different levels of risk and potential returns.
Having access to a wide range of investment assets is a good thing, as it allows you to create a portfolio that aligns with your risk tolerance and financial goals. But if you’re focused on portfolio diversification, in particular, one of the best assets to consider is gold.
Adding gold to your portfolio allows you to safeguard your wealth and counter the risk of losses from more volatile investments — so it can make a lot of sense to add it to your investment or retirement portfolio. And, if you want to add gold to your 401(k), there are a few smart ways you can do that, whether you’re a novice investor or a more seasoned pro.
Find out more about your gold IRA options online here.
6 smart ways to buy gold with your 401(k)
There are a few different ways that you can add gold to your retirement plan using your 401(k). These include:
Gold individual retirement account (IRA)
If your 401(k) plan doesn’t provide options for gold investments, it may be worth exploring a self-directed gold IRA instead. Unlike a traditional IRA, a self-directed gold IRA allows you to make investment decisions, including allocating funds to physical gold or other precious metals.
With this approach, you are purchasing and securely storing gold bars or coins as part of your retirement portfolio. While this option provides a sense of security through physical ownership, it also requires careful consideration of storage and insurance logistics and may involve higher administrative costs.
That said, the benefits of a gold IRA can outweigh the costs, as many investors prefer to hold physical gold bars or coins due to the tangible nature and unique benefits offered by these assets.
Explore the unique benefits of gold investing now.
Gold exchange-traded funds (ETFs)
If you’re seeking a hassle-free and cost-effective way to add gold to your 401(k), a gold ETF is an excellent option to consider. These funds don’t require you to navigate the physical gold market. Rather, they track the price of gold and are traded on the stock exchange instead.
Investing in gold ETFs through your 401(k) allows for easy management within the familiar framework of your retirement account. Taking this route also provides you with exposure to the precious metal without the need for physical possession — which can be a smart way to diversify your retirement portfolio without extra requirements or hassles.
Gold mutual funds
Similar to ETFs, gold mutual funds offer a diversified approach to investing in gold. These funds pool money from multiple investors to invest in a variety of gold-related assets, such as mining stocks and bullion.
While the performance of gold mutual funds is influenced by factors beyond the price of gold, they provide a way to capitalize on the potential growth of the precious metal within the structure of your 401(k). And, with a gold mutual fund, you won’t have to worry about storage, insurance or custodians like you would with physical gold.
Gold mining stocks
Investing in gold mining stocks with your 401(k) is another avenue that may be worth considering. While this approach introduces some additional market risk compared to owning physical gold in your 401(k), it also offers the potential for higher returns. In turn, it can be a good option if you have a higher risk tolerance or have already diversified your portfolio to offset risk with safer assets.
That additional market risk is a result of gold mining stocks being influenced by factors such as operational efficiency, exploration success and commodity prices. By including a carefully selected gold mining stock or two in your 401(k), it can provide exposure to the gold sector while leveraging the growth potential of successful mining companies.
Gold certificates
Gold certificates offer a middle ground between physical possession and electronic ownership, so they may be worth considering if you’re torn between investing in physical gold and other types of gold investments with your 401(k). These certificates represent ownership of a specified quantity of gold held by a financial institution.
While you won’t physically own the gold if you invest in gold certificates, this option provides a convenient and secure way to include gold in your 401(k) without the need for storage concerns. Before choosing this option, though, be sure to carefully research the credibility and reputation of the financial institution issuing the certificates.
Gold futures and options
If you’re a seasoned investor who’s comfortable with derivatives, gold futures and options can also be utilized within a self-directed IRA. These financial instruments allow you to speculate on the future price movements of gold without directly owning the metal.
However, trading in futures and options requires a thorough understanding of market dynamics. In turn, it is generally considered more suitable for experienced investors, so if you’re a beginner this may not be the best option for your needs or experience level.
The bottom line
As you explore the various ways to include gold in your 401(k), it’s crucial to align your investment choices with your financial goals, risk tolerance and level of expertise. But whether you opt for the simplicity of gold ETFs, the potential returns of gold mining stocks or the tangible security of owning physical gold, integrating gold into your retirement portfolio can be a prudent strategy for diversification and wealth preservation.
CBS News
U.S. mulls ban on Chinese-made TP-Link routers over security concerns
The U.S. is considering banning the sale of TP-Link internet routers, which are made in China, over concerns the home devices pose a security risk, the Wall Street Journal reported.
Authorities may ban the popular routers, which were linked to Chinese cyberattacks, as early as next year when President-elect Donald Trump takes office, according to the report.
Trump has signaled that he is prepared to take a tough stance on China in his second term in office, including by introducing levies of as much as 60% on Chinese-made goods.
TP-Link says its routers do not account for a majority of the internet router devices in U.S. homes and small businesses. The routers are available for purchase on Amazon.com, where they are a best-seller. Amazon did not immediately respond to CBS MoneyWatch’s request for comment on the potential ban.
The company’s connectivity products are used by the U.S. Defense Department and other federal government agencies, too, according to the WSJ.
For its part, TP-Link told CBS MoneyWatch that the company’s “security practices are fully in line with industry security standards in the U.S.”
“We implement rigorous secure product development and testing processes, and take timely and appropriate action to mitigate known vulnerabilities,” a TP-Link spokesperson said in a statement to CBS MoneyWatch.
Many consumer brands targeted by Chinese hackers
The company added that many consumer electronics brands are targeted by China-based hacking groups and that it welcomes “opportunities to engage with the federal government to demonstrate that our security practices are fully in line with industry security standards, and to demonstrate our ongoing commitment to the American market, American consumers and addressing U.S. national security risks.”
The Justice Department is investigating whether the routers’ relatively low price violates a law stipulating that companies can’t sell goods for less than the cost of production, the WSJ reported, citing a person familiar with the matter. On Amazon.com, a handful of router models by T-Link are available for sale with a base model costing around $99. The routers are available for sale through a business unit in California as well.
In a statement to CBS MoneyWatch, TP-Link said that while it does undercut competitor prices, it does not sell any products below cost.
Compromised routers
In October, Microsoft published an analysis which found that a Chinese hacking entity had access to a trove of compromised TP-Link routers.
“CovertNetwork-1658 specifically refers to a collection of egress IPs that may be used by one or more Chinese threat actors and is wholly comprised of compromised devices. Microsoft assesses that a threat actor located in China established and maintains this network. The threat actor exploits a vulnerability in the routers to gain remote code execution capability,” the report explains.
TP-Link said that it takes “appropriate action to mitigate any vulnerabilities” the company becomes aware of. It has also signed the U.S. Cybersecurity and Infrastructure Security Agency, or CISA, Secure-by-Design pledge.
CBS News
“Murder hornets” eradicated in the U.S., agriculture officials say
The Northern giant hornet, more commonly known as the “murder hornet,” has been eradicated in the U.S., agriculture officials said Wednesday.
The ominously nicknamed invasive species was confirmed to be in the U.S. in 2019 after officials in Washington state received and verified two reports of the hornet. Efforts quickly began to track and get rid of them.
The 2-inch-long hornet, with a stinger longer than that of a typical wasp, can deliver potent venom, but is largely dangerous to bees and other insects, not humans. Eradication efforts started because of the threat the hornet posed to bees and agriculture across the country.
“By tackling this threat head-on, we protected not only pollinators and crops, but also the industries, communities, and ecosystems that depend on them,” Dr. Mark Davidson, deputy administrator at USDA’s Animal and Plant Health Inspection Service, said in a news statement.
How “murder hornets” were eradicated
State, federal and international government agencies worked together to eradicate “murder hornets” in the U.S., the officials said.
To do so, first entomologists had to find the hornets’ nests. Finding the nests can be a challenge, because the hornets typically build their nests in forested areas, often in an underground cavity, according to the U.S. Department of Agriculture. In some cases, entomologists captured a live hornet, attached a radio tag to it, released it, and tracked the hornet back to its nest. Figuring out how to securely attach a radio tag to a hornet without harming it was a hurdle.
After finding a nest in a tree, a team plugged the nest with foam, wrapped the tree in plastic and vacuumed out the hornets. They also injected carbon dioxide into the tree to kill any remaining hornets.
In 2022, scientists said they were setting about 1,000 hornet traps in Washington. Hornets caught in traps help scientists find the location of nests. The previous year, Washington state officials destroyed a nest, finding nearly 1,500 hornets “in various stages of development.”
The public also helped officials track down hornet nests. If not for help from the public, there’s a good chance that the hornet could have been around for years to come, Sven Spichiger, Washington State Department of Agriculture pest program manager, said during a news conference Wednesday.
“All of our nest detections resulted directly or indirectly from public reports,” Spichiger said in a press release. “And half of our confirmed detections came from the public.
Could the hornet come back to the U.S.?
While officials in Washington celebrated the eradication of the invasive hornet species, Spichiger acknowledged they could come back to the U.S. He said officials would continue to keep an eye out for the hornet and encouraged members of the community to do the same.
“They got here once and they could do it again,” Spichiger said.
CBS News previously reported that it was unclear how the hornets first arrived in the U.S., though invasive species can be “unwitting hitchhikers” on things like shipping containers.
Even now, five years after the hornets appeared in the U.S., Spichiger said officials will never know exactly how they got to the country.
What makes “murder hornets” unique?
The hornet, an invasive species from Asia, can kill an entire hive of honeybees in as little as 90 minutes, according to agriculture officials.
“The hornets can enter a ‘slaughter phase‘ where they kill entire hives by decapitating the bees. The hornets then defend the hive as their own, taking the brood to feed their own young,” according to the Washington State Department of Agriculture. “They also attack other insects but are not known to destroy entire colonies of those insects.”
The hornets typically only attack people or pets when threatened, but can sting repeatedly.
The hornet species has a large orange or yellow head and black-and-orange stripes across its body.
They were first detected in North America in British Columbia, Canada ,in August 2019, authorities said, and then were confirmed in Washington state by the end of 2019.
While the U.S. appears to have gotten rid of them, at least for now, scientists in Spain last month reported sightings of the hornet species in Europe. They described two sightings of the hornet in the journal Ecology and Evolution.
CBS News
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