Is It Better To Get Your 401k In Gold?

by Darwin on November 28, 2014

Making plans for your retirement investments can be a daunting task. There are several questions that you should ask yourself to ensure that your returns are as high as they should be. One of those questions is, “considering current economic, geopolitical, and market conditions, is it better to get your 401k in gold or in traditional stocks?” Today, we’ll look at these three main factors and provide an answer as to which is better considering current conditions around the world.

Economic Conditions

Economic conditions here in the United States are going great. Our unemployment rates are down, job numbers are up, corporate profits are up; the bottom line is that everything seems great. However, for our positive economy to sustain itself, we need to look at conditions around the world. That’s where things get a bit scary. Currently the engine of the Eurozone, Germany, has been struggling. While the first quarter of this year looked great for Germany, the rest of the year has led to reduced economic expectations for 2015. Unfortunately, because Germany is the engine that drives the Eurozone, the entire multi-country currency is sitting on the brink of financial recession.

Geopolitical Conditions

Watching the news on a daily basis can tell you that geopolitical conditions around the world aren’t doing so well. There are currently three main issues in geopolitics I’ve been watching closely…

  • Russia – Russia believes that the Ukraine owned Crimea Peninsula is rightfully theirs. As a result, they’ve invaded the peninsula forcing sanctions from western countries.
  • Terrorism – Terrorism is on the rise. Every day when I watch the news, I’m seeing more stories about groups like ISIS and Hamas becoming more active. So much so that President Obama has authorized sending 1,500 American troops to Iraq!
  • Saudi Arabia – By reducing oil prices, Saudi Arabia has put pressure on several oil production countries, including the United States.

Market Conditions

Looking at the cover, the stock market seems like it’s doing very well. Over the past several years, we’ve experienced a bull market that has assisted the Dow Jones Industrial Average and the S&P 500 in breaking their records time and time again; with the NASDAQ getting closer and closer to breaking its record as well. However, we can’t judge a book by its cover. As a matter of fact, all of this growth has given way to a new problem. Today, we’re experiencing high valuations in the stock market that could lead to a market correction.

Final Thoughts

All in all, conditions seem good for the moment. However, by looking around at the three main signs for how the market will perform in the future, my decision goes to getting a 401k in gold rather than a traditional 401k. Currently, the Eurozone is struggling, geopolitical issues are getting worse, and the market is overvalued. All of these issues are signs that a market correction could be coming soon. While it may be enticing to put your retirement savings into today’s bullish stock market, looking to gold is a much safer choice for now.

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