The U.S. Securities and Exchange Commission (SEC) has recently issued a warning to investors regarding the risks associated with fear of missing out (FOMO). The SEC emphasized that just because others may be investing in a particular opportunity, it does not necessarily mean that it is the right choice for everyone. In light of the increased interest in online investing and the surge of digital assets and meme stocks, the SEC recognizes that understanding these types of investments can be overwhelming.
SEC's FOMO Warning
The SEC's Office of Investor Education and Advocacy issued a warning on social media platform X, highlighting the dangers of succumbing to FOMO. This warning is part of a series of advice from the agency. The Office emphasized the importance of avoiding FOMO and urged investors to carefully consider which investments align with their individual goals and objectives.
Referencing an article on the regulator's website, the SEC noted the growing interest in online investing and the popularity of digital assets and meme stocks. The SEC defined digital assets as cryptocurrencies, coins, and tokens, including those offered through initial coin offerings (ICOs). Additionally, meme stocks are stocks that gain popularity based on internet trends and social views, rather than traditional factors such as a company's performance. The SEC also mentioned non-fungible tokens (NFTs) as another type of investment to consider.
The SEC's cautionary statement coincides with its upcoming decision on spot bitcoin exchange-traded funds (ETFs). An announcement is expected in the coming week, potentially opening the doors for trading of approved spot bitcoin ETFs starting on January 11. Several applicants are optimistic about the approval of their funds, with Blackrock, the world's largest asset manager, reportedly preparing for a spot bitcoin ETF launch with over $2 billion in funds.
As investors eagerly await the SEC's decision on spot bitcoin ETFs, what are your thoughts on the SEC's warning about FOMO? Share your opinions in the comments section below.
Frequently Asked Questions
Can I have physical gold in my IRA
Gold is money, not just paper currency or coinage. People have been using gold for thousands of years to store their wealth and protect it from economic instability and inflation. Gold is a part of a diversified portfolio that investors can use to protect their wealth from financial uncertainty.
Today, many Americans invest in precious metals such as gold and silver rather than stocks and bonds. Even though owning gold is not a guarantee of making money, there are many reasons why you might want to add gold to your retirement savings portfolio.
One reason is that gold historically performs better than other assets during financial panics. Between August 2011 to early 2013, gold prices rose close to 100 percent while the S&P 500 fell 21 per cent. Gold was one asset that outperformed stocks in turbulent market conditions.
Gold is one of the few assets that has virtually no counterparty risks. If your stock portfolio goes down, you still own your shares. If you have gold, it will still be worth your shares even if the company in which you invested defaults on its debt.
Finally, gold provides liquidity. This means you can easily sell your gold any time, unlike other investments. You can buy gold in small amounts because it is so liquid. This allows you to profit from short-term fluctuations on the gold market.
How much tax is gold subject to in an IRA
The fair market value of gold sold is the basis for tax. You don't pay taxes when you buy gold. It's not considered income. If you sell it after the purchase, you will get a tax-deductible gain if you increase the price.
For loans, gold can be used to collateral. Lenders try to maximize the return on loans that you take against your assets. In the case of gold, this usually means selling it. However, there is no guarantee that the lender would do this. They may hold on to it. Or they might decide to resell it themselves. Either way you will lose potential profit.
To avoid losing money, only lend against gold if you intend to use it for collateral. You should leave it alone if you don't intend to lend against it.
What Precious Metals Can You Invest in for Retirement?
Gold and silver are the best precious metal investments. Both are easy to sell and can be bought easily. You should add them to your portfolio if you are looking to diversify.
Gold: The oldest form of currency known to man is gold. It is very stable and secure. It's a great way to protect wealth in times of uncertainty.
Silver: Silver is a popular investment choice. It's a great option for those who want stability. Unlike gold, silver tends to go up instead of down.
Platinium is another precious metal that is becoming increasingly popular. It's resistant to corrosion and durable, similar to gold and silver. It is, however, more expensive than its competitors.
Rhodium. Rhodium is used as a catalyst. It's also used in jewelry making. It's also relatively inexpensive compared to other precious metals.
Palladium: Palladium has a similarity to platinum but is more rare. It's also more affordable. It's a popular choice for investors who want to add precious metals into their portfolios.
Statistics
- Contribution limits$6,000 (49 and under) $7,000 (50 and up)$6,000 (49 and under) $7,000 (50 and up)$58,000 or 25% of your annual compensation (whichever is smaller) (lendedu.com)
- Indeed, several financial advisers interviewed for this article suggest you invest 5 to 15 percent of your portfolio in gold, just in case. (aarp.org)
- The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (aarp.org)
- (Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (smartasset.com)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
External Links
irs.gov
cftc.gov
- Fraud Advisory: Precious Metals Fraud
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