Looking for recommendations for investing in paper gold (401k and Roth IRA)

Discussion of the Gold portion of the Permanent Portfolio

Moderator: Global Moderator

User avatar
CT-Scott
Executive Member
Executive Member
Posts: 202
Joined: Sat Mar 21, 2020 8:39 am

Looking for recommendations for investing in paper gold (401k and Roth IRA)

Post by CT-Scott » Fri Apr 03, 2020 11:39 am

I know that there are existing threads about buying paper gold, but I wanted my own. :) Plus, I wasn't sure if there are different recommendations based on whether you're putting it in a taxable account, a Roth IRA, or a tax-deferred account like a 401k. Normally you can't buy gold in employer-administered 401k accounts, but a while back I had a side business (still do, as far as I'm concerned, but haven't reported any income/losses on it in several years). When my wife and I each left our jobs at the time, we rolled over our employer-provided 401k accounts to these accounts. Initially, they were administered by Vanguard, but later converted to TD Ameritrade. So in these TD Ameritrade accounts I can purchase any stock I want (at one point I had the money invested in PRPFX).

Anyway, so I've got that TD Ameritrade 401k account. We've also got our Vanguard Roth IRA accounts. I'm not sure what I can/can't invest in with that Vanguard Roth IRA account. If someone can advise on that, that would be great.

For the TD Ameritrade 401k accounts, what would be your recommendation for a paper gold fund? I've seen a lot of different recommendations in this forum, but I simply can't understand a lot of the finer details, so please provide answers in a dumbed-down manner.
ppnewbie
Senior Member
Senior Member
Posts: 148
Joined: Fri May 03, 2019 6:04 pm

Re: Looking for recommendations for investing in paper gold (401k and Roth IRA)

Post by ppnewbie » Fri Apr 03, 2020 10:46 pm

I chose IAU instead of GLD etf in my 401k. It has a lower expense ratio. It was the second largest gold etf so I figured it was relatively safe. GLD is the (pardon the pun) gold standard though. It is the largest and I believe it is the most liquid. Meaning when you want to sell there is going to be a buyer. But it has the highest expense ratio.
User avatar
Ad Orientem
Executive Member
Executive Member
Posts: 3186
Joined: Sun Aug 14, 2011 2:47 pm
Location: Florida USA
Contact:

Re: Looking for recommendations for investing in paper gold (401k and Roth IRA)

Post by Ad Orientem » Sat Apr 04, 2020 7:55 pm

IAU or GLD are what the vast majority of us use for so called paper gold. My preference is IAU because of the much lighter ER. Under normal circumstances I favor physical for at least half of the gold allocation. But right now physical is in short supply and what is out there is mostly going for outrageous premiums. So yeah, for now I'd stick to paper/etfs until some semblance of normalcy returns. Unless you can afford those big 400 oz bricks they trade on the COMEX.
User avatar
LittleDinghy
Associate Member
Associate Member
Posts: 39
Joined: Sun Mar 17, 2019 11:44 am

Re: Looking for recommendations for investing in paper gold (401k and Roth IRA)

Post by LittleDinghy » Sat Apr 04, 2020 8:17 pm

Ad Orientem wrote:
Sat Apr 04, 2020 7:55 pm
IAU or GLD are what the vast majority of us use for so called paper gold. My preference is IAU because of the much lighter ER. My preference is IAU because of the much lighter ER."
About this time a year ago, when I was thinking a lot about how to set up my GB, people on this forum expressed a lot of interest in AAAU. So, I'm interested to see that IAU or GLD are what the vast majority of us use for so called paper gold and wondering if there are reasons why I should move some or all of my AAAU holdings to one of either IAU or GLD. About 22% of my gold is physical and the rest is AAAU.

Thank you...
User avatar
I Shrugged
Executive Member
Executive Member
Posts: 651
Joined: Tue Dec 18, 2012 6:35 pm

Re: Looking for recommendations for investing in paper gold (401k and Roth IRA)

Post by I Shrugged » Sat Apr 04, 2020 8:24 pm

I have GLD but wish I had AAAU instead. AAAU is cheaper, probably safer, and redeemable in gold.
ppnewbie
Senior Member
Senior Member
Posts: 148
Joined: Fri May 03, 2019 6:04 pm

Re: Looking for recommendations for investing in paper gold (401k and Roth IRA)

Post by ppnewbie » Mon Apr 06, 2020 1:47 am

I have not looked into to it in detail but from what I remember it is a tiny etf that may not trade well. On a positive note it is back by the Western Australian government.
User avatar
stpeter
Associate Member
Associate Member
Posts: 46
Joined: Tue Nov 26, 2013 8:26 pm

Re: Looking for recommendations for investing in paper gold (401k and Roth IRA)

Post by stpeter » Fri Apr 10, 2020 6:05 pm

When I adopted the permanent portfolio about 5 years ago, I did a bunch of research and got most comfortable with SGOL, in large measure because they store their physical gold in Switzerland.
PrimalToker
Junior Member
Junior Member
Posts: 6
Joined: Thu Feb 27, 2020 12:18 pm

Re: Looking for recommendations for investing in paper gold (401k and Roth IRA)

Post by PrimalToker » Sat Apr 11, 2020 3:28 pm

ppnewbie wrote:
Mon Apr 06, 2020 1:47 am
I have not looked into to it in detail but from what I remember it is a tiny etf that may not trade well. On a positive note it is back by the Western Australian government.
And you can transfer your shares to their brokerage account and they'll mail you physical gold. What other ETF does that? None as far as I know.
User avatar
CT-Scott
Executive Member
Executive Member
Posts: 202
Joined: Sat Mar 21, 2020 8:39 am

Re: Looking for recommendations for investing in paper gold (401k and Roth IRA)

Post by CT-Scott » Wed Apr 15, 2020 9:27 am

Hi all, I'm sorry, but I'm still very confused as to which *type* of account(s) I should/shouldn't hold paper gold in. Looking at past performance of IAU, AAAU, SGOL, GLD, etc., they seem "close enough" that I'm not going to fret too much about the specific fund (unless that matters in some way in regards to my primary question here).

So, if I have a weird 401k account that technically allows me to buy/sell any fund or stock I want, is that a good account to use? Or perhaps, even though I'm technically allowed to buy paper gold in that 401k account, I would be asking for trouble by doing so?

I also have a Roth IRA that I could use. Is that the best choice? What, if any, paperwork headaches are required at tax time? Any issues with buying/selling (to rebalance) later inside of a Roth IRA?

Then there's a taxable account, but I'd actually prefer to hoard most of my cash right now, as we are wanting to move and would like that cash on hand for that purpose. But if I *did* have extra cash I didn't mind using in a taxable account, would this be best? What are the tax-time implications of buying/selling with a taxable account?

Lastly, I'm assuming that I can't hold physical gold in relation to a 401k or Roth IRA, but only with my after-tax dollars, correct?
User avatar
technovelist
Executive Member
Executive Member
Posts: 5573
Joined: Wed Sep 15, 2010 11:20 pm

Re: Looking for recommendations for investing in paper gold (401k and Roth IRA)

Post by technovelist » Wed Apr 15, 2020 10:13 am

CT-Scott wrote:
Wed Apr 15, 2020 9:27 am
Hi all, I'm sorry, but I'm still very confused as to which *type* of account(s) I should/shouldn't hold paper gold in. Looking at past performance of IAU, AAAU, SGOL, GLD, etc., they seem "close enough" that I'm not going to fret too much about the specific fund (unless that matters in some way in regards to my primary question here).

So, if I have a weird 401k account that technically allows me to buy/sell any fund or stock I want, is that a good account to use? Or perhaps, even though I'm technically allowed to buy paper gold in that 401k account, I would be asking for trouble by doing so?

I also have a Roth IRA that I could use. Is that the best choice? What, if any, paperwork headaches are required at tax time? Any issues with buying/selling (to rebalance) later inside of a Roth IRA?

Then there's a taxable account, but I'd actually prefer to hoard most of my cash right now, as we are wanting to move and would like that cash on hand for that purpose. But if I *did* have extra cash I didn't mind using in a taxable account, would this be best? What are the tax-time implications of buying/selling with a taxable account?

Lastly, I'm assuming that I can't hold physical gold in relation to a 401k or Roth IRA, but only with my after-tax dollars, correct?
Gold Star Trust (goldstartrust.com) can open IRAs, whether Traditional or Roth, and hold physical gold for you.
I use them and find them pretty easy to deal with, although you will need to have a dealer to sell you the gold. They don't buy or sell gold themselves, I believe because that is prohibited by IRS regulations.
Another nod to the most beautiful equation: e + 1 = 0
User avatar
sophie
Executive Member
Executive Member
Posts: 3482
Joined: Mon Apr 23, 2012 7:15 pm

Re: Looking for recommendations for investing in paper gold (401k and Roth IRA)

Post by sophie » Wed Apr 15, 2020 10:38 am

Yes, for a 401K/IRA that allows you to buy gold at all, you have two options:

1) A gold IRA like the one Tech suggested. Fidelity can do it too (unallocated gold bullion coins held in Nova Scotia). This only applies to IRAs though. You can't do it in a 401K. There are also restrictions on the specific coins you can buy.

2) Gold ETFs. I am not comfortable with IAU or GLD, but others on the forum are - do your own homework. AAAU is my current favorite - it's the Perth Mint's new ETF, low volume but backed by the Mint's gold store, and by inference the government of Australia. IMHO that is far safer than a private ETF that is doing backroom deals with its gold holdings to make extra $$ on the side. SGOL may be mildly better than IAU/GLD, but it's expensive.

In general, you want most of your gold in taxable, around 2/3 if you can swing it. You have much better options & control in taxable. The gold ETFs in tax-advantaged accounts are there in order to avoid having to deal with taxes during rebalances.
User avatar
ochotona
Executive Member
Executive Member
Posts: 3175
Joined: Fri Jan 30, 2015 5:54 am

Re: Looking for recommendations for investing in paper gold (401k and Roth IRA)

Post by ochotona » Wed Apr 15, 2020 1:22 pm

sophie wrote:
Wed Apr 15, 2020 10:38 am
Fidelity can do it too (unallocated gold bullion coins held in Nova Scotia). This only applies to IRAs though. You can't do it in a 401K. There are also restrictions on the specific coins you can buy.

What is this sorcery???
Post Reply