Vertoro Asks:

Save up to 40% of our fee when buying coins in volume!

A very good client recently came to me with a problem. Her Roth Individual Retirement Account (IRA) had lost seven percent in the month of January 2008. She was very concerned.

She was right. Losses like that are not sustainable. At that same rate, she would have lost 84% of her retirement account by the end of the year.

She was not in control. Her IRA was not self-managed. She had no desire to continue trusting the people who were managing it. She got out.

Even with the substantial penalty for early withdrawal, typically 10%, plus the state and federal income tax withholding, she was better off, in her view, taking her money out than leaving it in. So, what did she do with the money? She bought gold and silver coins.

In the six months since 3 September 2007 the price of gold has gone from $672 to $980. That increase is 46% over the period, or 92% per annum. So, which would you rather have? Gold coins that increase in value by 92% or an IRA that loses value by 84% per year?

The exact same trend may be seen in silver. Silver was $12.10 and is now $19.91. That increase is 65% for the period, or 130% per annum. Again, which would you prefer? To lose 84% of the value of your retirement fund, or see it grow by 130%?

I am not saying that the managers of these programs are bad or wrong. They may be doing their best. They have certain limits to what choices they are allowed to take by the legislators who set up the programs, by the regulators, and by the banks for which they work. Closed end funds might have been the way to go when the managers of your IRA set up the qualified plan needed to meet approval from state and federal legislators, regulators, and financiers. But, I am saying that you should look carefully at the writing on the wall.

It may be that you would be able to convert your 401K to a self-managed IRA. It may be that you would get adequate results from holding gold and silver in your name as shares of exchange traded funds such as GLD. However, if you also have concerns about currency controls, sudden shifts in tax policy as the deficits get worse, hyperinflation of the money supply, or other catastrophes, you might also feel better having gold and silver coins in your possession. Because, when it comes right down to it, you can't control the economy, you can't control the banking system, you have no idea how the stock market is going to end up this year, and you have no reason to expect the government to react calmly to crisis.

An alternative to managing your 401K or IRA, which does not involve cashing out at a significant penalty, is to use it as collateral for a low interest loan. Suppose your IRA is not losing 84% per annum? But, you still want to own gold and silver coins in your possession, as a hedge against inflation and for emergencies. You can use your retirement account assets to borrow money. Obviously, doing so for general spending purposes, like going on vacation or a new toy, would be very unwise. Gold and silver coins in your home are another matter, since these represent an investment. If the value of gold and silver continue to rise, you should have no problem selling a portion of your coins to repay the loan after a few months.

For the months of March and April 2008, Vertoro will reduce our mark-up on coins for any order over $25,000 by 20%, for any order over $50,000 by 30%, and for any order over $100,000 by 40%. Place your order on our buy page. We'll contact you with instructions and specifics on how many more coins you get.

Here is our coin catalog. We strongly recommend you choose gold and silver coins, today.

- Jim Davidson
Colorado, 3 March 2008