Solo 401k plan and Precious Metal Investment | Gold Silver Worlds

Posted: 16 Aug 2014 03:17 AM PDT

Submitted by Dmitriy Fomichenko, founder and president of Sense Financial Services LLC. This article is primarily useful for US and Canada based readers.

After the financial turmoil just a few years ago, many investors are now exploring safer investment options such as real estate and precious metals. Especially for retirement accounts, the more secured the better. This is when Solo 401k plan gains attention as it allows the addition of precious metals, among other assets, into a retirement portfolio.

Gold and silver as Investor's Safe Haven

Gold, silver and other precious metals are among the longest traded commodities in the history. As with any commodity, they can safeguard against inflation and volatile market trends. In fact, when investors start to lose trust in the stock market or the overall economy, the price of precious metals often increases significantly.

Strategies to invest in Gold and Silver using a Solo 401k plan

Buy-and-hold strategy: With a buy and hold strategy, often investors will add precious metals to the portfolio and leave it there for years. Not only does this help safeguard against inflation, but investors may also gain from long term value appreciation. This strategy requires less monitoring and less effort to keep up with the market trends. Often, investors will start the account and forget about it until they are ready to make withdrawals. Less administrative cost, better security and more time to focus on their main business or commitments elsewhere – these are the main reasons to choose this type of strategy.

Often, other retirement accounts allow only stocks, mutual funds and similar investments. A Solo 401k plan, on the other hand, allows the addition of non-traditional options, among which are precious metals. Investors might not necessarily want to put all their savings into gold and silver, but adding them to the portfolio is a great way to diversify and minimize the risks.

Buy-and-sell strategy: A buy-and-hold requires less work but it is not always the right option for everyone. Perhaps you have less time to prepare for your retirement, or perhaps you want a bigger return. A lot of Solo 401k account holders are heavily invested in precious metals, so they are already keeping track of the market trends and gold price anyway. For this types of investors, often a buy and sell strategy is preferred. With this strategy, investors will monitor the market closely and trade more often when they see profitable opportunities.

A Solo 401k plan with checkbook control is a powerful tool for the buy-and-sell strategy. It offers self directed option, which means investors do not have to wait for custodial approval before making the move. In fact, the account holders act as the trustee and have total control over their retirement funds. Checkbook control also means that transactions can be made as easily as writing a check. Many investors found this flexibility crucial to successfully invest in precious metals and other commodities.

To learn if you are qualified for a Solo 401k plan, or how to add precious metals to your retirement portfolio, request a free consultation with Sense Financial, a leading provider of Self Directed IRA and Solo 401k.

About the author: Dmitriy Fomichenko is the founder and president of Sense Financial Services LLC, a boutique financial firm specializing in self-directed retirement accounts with checkbook control. He began his career in financial planning and real estate investing in 2000. He owns multiple investment properties in various states and is a licensed California Real Estate Broker. Over the years, he has instructed hundreds of investment and financial planning seminars and has mentored thousands of investors.

Franco-Nevada, Sandstorm Gold to Invest $120M in Karma - August ...

Posted: 13 Aug 2014 03:20 PM PDT

Franco-Nevada Corporation (FNV - Snapshot Report) together with Sandstorm Gold Ltd. (SAND - Snapshot Report) has inked an agreement with True Gold Mining Inc. to finance the construction of the Karma project. Per the deal, the companies will invest $120 million in the project located in Burkina Faso, West Africa. True Gold expects first gold pour at Karma by the end of 2015.

Franco-Nevada's shares rose as much as 3.9% in the trading session following the announcement.

Franco-Nevada and Sandstorm will offer a start-up funding of $100 million in 75% and 25% sharing, respectively. From Mar 31, 2016, True Gold will deliver 20,000 ounces of gold annually to the Syndicate for the next five years amounting to a total of 100,000 ounces. After five years, True Gold will have to provide the Syndicate refined gold equal to 6.5% of equivalent amount of gold produced from the Karma mine for ongoing payments. The Syndicate, in turn, will pay 20% of the spot price of gold to True Gold for each ounce delivered.

The agreement is inclusive of all concessions applicable within the 856 square kilometers of the Karma project along with a specified area of interest of 5 kilometers surrounding the project. Moreover, True Gold can opt for an additional funding of up to $20 million from the Syndicate during the next 18 months. This additional amount has to be repaid in eight quarterly deliveries of up to 30,000 ounce of gold based on the proportional portion of the amount drawn.

Franco-Nevada (Barbados) Corporation (FNB) – a fully owned subsidiary of Franco-Nevada – will be providing financing to a fully-owned subsidiary of True Gold. The shares and assets of the company operating the Karma project will secure the obligations of the agreement.

According to Mark O'Dea, Executive Chairman of True Gold, the funding assistance by Franco-Sandstorm was the best solution in terms of cost of capital, operational flexibility, business interest and long-term partnership, which can benefit shareholders.

Franco-Nevada operates as a gold-focused royalty and stream company with additional interests in platinum group metals, oil and gas and other resource properties. The company continues to benefit from its expansions and exploration discoveries made by operators or developers.

Franco-Nevada currently holds a Zacks Rank #3 (Hold).

Better-ranked companies in the gold-mining space worth considering include Harmony Gold Mining Company Ltd. (HMY - Analyst Report) and NovaGold Resources Inc. (NG - Snapshot Report) with both holding a Zacks Rank #2 (Buy).

Solo 401k plan and Precious Metal Investment | Gold Silver Worlds | How to invest in gold

Solo 401k plan and Precious Metal <b>Investment</b> | <b>Gold</b> Silver Worlds | How to invest in gold

0 Comment for "Solo 401k plan and Precious Metal Investment | Gold Silver Worlds | How to invest in gold"

Popular Posts