Bitcoin: The Preferred Investment
Cathie Wood, founder and CEO of Ark Investment Management, recently expressed her strong support for bitcoin's future. During an interview on Bloomberg's "Merryn Talks Money" podcast, Wood confidently stated that if given the choice between gold, cash, or bitcoin as a ten-year investment, she would choose bitcoin "hands down."
Wood's preference for bitcoin over traditional assets like gold and cash stems from her belief that bitcoin serves as a hedge against both inflation and deflation. She views bitcoin as the digital gold of the future, with an already established demand and a unique value proposition.
Bitcoin's Potential and Institutional Investment
Wood has long been a proponent of bitcoin's potential, having projected in September 2021 that it could reach a staggering $500,000 within five years. She also anticipates the growth of the metaverse, predicting it to become a multi-trillion-dollar industry in the same timeframe.
In the podcast interview, Wood highlighted the nascent stage of institutional investment in bitcoin and the shift in asset preference among younger generations. She emphasized that institutions are only beginning to get involved, while young people are increasingly inclined to hold bitcoin rather than gold.
Deflationary Economy and Bitcoin's Role
Wood's outlook on the U.S. economy is one of notable deflationary pressure and uncertainty. She believes that a deflationary period is on the horizon and that evidence of such deflation is already emerging. Wood compared the current economic climate to the 19-teens, rather than the inflationary period of the 1970s.
Contrary to popular belief, Wood does not attribute bitcoin's rise to inflation. She sees bitcoin as a transparent and decentralized network with no counterparty risk. In contrast, regional banks' internal operations are less transparent, and they rely on selling securities to fund their activities. Therefore, Wood believes that bitcoin's value lies in its transparency and lack of counterparty risk.
Cathie Wood's Insights and Beyond
In addition to her views on bitcoin, Wood also discussed the topic of artificial intelligence (AI) and shared her insights on Tesla. As the CEO of Ark Investment, Wood and her team anticipate significant advancements in AI and the transformative impact it will have on various industries.
What do you think about Cathie Wood's latest insights? Share your thoughts in the comments section below.
Frequently Asked Questions
Is it a good retirement strategy to buy gold?
Although gold investment may not seem appealing at first glance due to the high average global gold consumption, it's worth considering.
The best form of investing is physical bullion, which is the most widely used. There are other ways to invest gold. It is best to research all options and make informed decisions based on your goals.
If you don't want to keep your wealth safe, buying shares in companies that extract gold and mining equipment could be a better choice. If you require cash flow, gold stocks can work well.
You can also put your money in exchange traded funds (ETFs). These funds allow you to be exposed to the price and value of gold by holding gold related securities. These ETFs usually include stocks of precious metals refiners or gold miners.
What precious metal is best for investing?
This question is dependent on the amount of risk you are willing and able to accept as well as the type of return you desire. Although gold has traditionally been considered a safe investment choice, it may not be the most profitable. For example, if your goal is to make quick money, gold may not suit you. You should invest in silver if you have the patience and time.
If you don't care about getting rich quickly, gold is probably the way to go. However, silver might be a better option if you're looking for an investment that provides steady returns over long periods.
How Do You Make a Withdrawal from a Precious Metal IRA?
First, decide if it is possible to withdraw funds from an IRA. Next, ensure you have enough cash on hand to pay any penalties or fees that could be associated with withdrawing funds.
You should open a taxable brokerage account if you're willing to pay a penalty if you withdraw early. You will also have to account for taxes due on any amount you withdraw if you choose this option.
Next, calculate how much money your IRA will allow you to withdraw. This calculation depends on several factors, including the age when you withdraw the money, how long you've owned the account, and whether you intend to continue contributing to your retirement plan.
Once you determine the percentage of your total saved money you want to convert into cash, then you need to choose which type IRA you will use. Traditional IRAs allow you to withdraw funds tax-free when you turn 59 1/2 while Roth IRAs charge income taxes upfront but let you access those earnings later without paying additional taxes.
After these calculations have been completed, you will need to open a brokerage bank account. Most brokers offer free signup bonuses and other promotions to entice people to open accounts. To avoid unnecessary fees, however, try opening an account using a debit card rather than a credit card.
You will need a safe place to store your coins when you are ready to withdraw from your precious metal IRA. Some storage areas will accept bullion, while others require you to purchase individual coins. Either way, you'll need to weigh the pros and cons of each before choosing one.
Bullion bars, for example, require less space as you're not dealing with individual coins. However, each coin will need to be counted individually. However, you can easily track the value of individual coins by storing them in separate containers.
Some prefer to keep their money in a vault. Others prefer to store their coins in a vault. No matter what method you use, it is important to keep your bullion safe so that you can reap its benefits for many more years.
How much should precious metals make up your portfolio?
To answer this question, we must first understand what precious metals are. Precious elements are those elements which have a high price relative to other commodities. This makes them very valuable in terms of trading and investment. Gold is by far the most common precious metal traded today.
But, there are other types of precious metals available, including platinum and silver. While gold's price fluctuates during economic turmoil, it tends to remain relatively stable. It is not affected by inflation or deflation.
All precious metals prices tend to rise with the overall market. That said, they do not always move in lockstep with each other. For example, when the economy is doing poorly, the price of gold typically rises while the prices of other precious metals tend to fall. This is because investors expect lower interest rates, making bonds less attractive investments.
In contrast, when the economy is strong, the opposite effect occurs. Investors prefer safe assets such as Treasury Bonds and demand fewer precious metals. Since these are scarce, they become more expensive and decrease in value.
Therefore, to maximize profits from investing in precious metals, you must diversify across multiple precious metals. You should also diversify because precious metal prices can fluctuate and it is better to invest in multiple types of precious metals than in one.
Should You Invest Gold in Retirement?
The answer will depend on how many dollars you have saved so far and whether you had gold as an investment option at the time. Consider investing in both.
Gold offers potential returns and is therefore a safe investment. It is a good choice for retirees.
While many investments promise fixed returns, gold is subject to fluctuations. As a result, its value changes over time.
This doesn't mean that you should not invest in gold. This just means you need to account for fluctuations in your overall portfolio.
Another advantage to gold is that it can be used as a tangible asset. Gold is more convenient than bonds or stocks because it can be stored easily. It can also be transported.
You can always access your gold as long as it is kept safe. You don't have to pay storage fees for physical gold.
Investing in gold can help protect against inflation. Gold prices are likely to rise with other commodities so it is a good way of protecting against rising costs.
Also, you'll reap the benefits of having some savings invested in something with a stable value. Gold tends to rise when the stock markets fall.
You can also sell gold anytime you like by investing in it. As with stocks, your position can be liquidated whenever you require cash. You don't even need to wait for your retirement.
If you do decide to invest in gold, make sure to diversify your holdings. Don't put all of your eggs in one basket.
Don't buy too many at once. Start by purchasing a few ounces. Continue adding more as necessary.
The goal is not to become rich quick. Instead, the goal here is to build enough wealth to not need to rely upon Social Security benefits.
While gold may not be the best investment, it can be a great addition to any retirement plan.
Is gold a good IRA investment?
Any person looking to save money is well-served by gold. You can also diversify your portfolio by investing in gold. There's more to gold that meets the eye.
It's been used as a form of payment throughout history. It is sometimes called the “oldest currency in the world”.
Gold is not created by governments, but it is extracted from the earth. This makes it highly valuable as it is hard and rare to produce.
The price of gold fluctuates based on supply and demand. If the economy is strong, people will spend more money which means less people can mine gold. Gold's value rises as a result.
The flip side is that people tend to save money when the economy slows. This results in more gold being produced, which drives down its value.
This is why it makes sense to invest in gold for individuals and companies. If you make an investment in gold, you can reap the economic benefits whenever the economy is growing.
Additionally, you'll earn interest on your investments which will help you grow your wealth. In addition, you won’t lose any money if gold falls in value.
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- (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)
- Gold IRA, Add Sparkle to Your Retirement Nest egg
- Understanding China's Evergrande Crisis – Forbes Advisor
- Saddam Hussein's InvasionHelped Uncage a Bear In 1991 – WSJ
- How do you keep your IRA Gold at Home? It's not legal – WSJ
- 7 U.S. Code SS7 – Designation board of trade as contract marketplaces
- 26 U.S. Code SS 408 – Individual retirement account
The History of Gold as an Asset
From ancient times to the beginning of the 20th century, gold was used as a currency. It was universally accepted and loved for its beauty, durability, purity and divisibility. Aside from its inherent value, it could be traded internationally. There were different measures and weights for gold, as there was no standard to measure it. For example, one pound sterling in England equals 24 carats; one livre tournois equals 25 carats; one mark equals 28 carats; and so on.
The United States began issuing American coin made up 90% copper, 10% zinc and 0.942 fine-gold in the 1860s. This resulted in a decline of foreign currency demand and an increase in the price. At this point, the United States minted large amounts of gold coins, causing the price of gold to drop. The U.S. government was unable to pay its debts due to too much money being in circulation. To do so, they decided to sell some of the excess gold back to Europe.
Most European countries distrusted the U.S. Dollar and began to accept gold as payment. Many European countries started to accept paper money as a substitute for gold after World War I. The price of gold has risen significantly since then. Today, although the price fluctuates, gold remains one of the safest investments you can make.
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