Vanguard is one of the most successful investment organizations in the world. They have a network spanning the globe that connects investors to tons of different opportunities. When people are looking for a new addition to their portfolio, Vanguard is often the first place they check.
It's no secret that Vanguard has an amazing reputation. Investors report being very happy with their choices. That's partially because Vanguard is completely owned by its own investors. There aren't any shareholders or private owners that people are beholden to. Investors benefit immediately from the choices made.
You might want to know what Vanguard offers in terms of precious metals IRAs. It's legal to keep silver and gold in a self-directed retirement account. Vanguard is known for selling hundreds of retirement assets. Are precious metals among them?
We have done hundreds of hours of research on the best precious metals investment companies for anyone that wants to invest in an IRA!
Vanguard Services and Resources
Vanguard places a major focus on ETFs and mutual funds, which are two of the most popular investment options available. Their network allows them to connect investors to more than 3,300 ETFs and mutual funds. The mutual funds all have a strict minimum requirement to invest, but you can put more in if you want to.
If you purchase these assets from Vanguard instead of directly from the source, you get access to network discounts. You'll end up with a more affordable shopping list than if you had all the original commissions and fees added on. Vanguard tries to keep their fees transparent and low, especially on index funds and exchange traded funds.
When you go to the Vanguard website, you'll find educational materials about a whole host of different topics. There are pieces that can suit any learning style. In addition to the typical blog posts and articles, you'll also find some videos and even podcasts. The podcasts allow experts to talk about the economy, investment opportunities, and what beginning investors should be aware of.
One of Vanguard's most vital services is the Portfolio Watch. This is a digital feature in which an algorithm analyzes your portfolio and compares it to the average standard portfolio. Then they give you insights and guidance about the weak spots in your assets. For people who are new to investing and managing a self-directed IRA, this guidance is invaluable.
The Portfolio Watch analysis considers multiple different factors and gives you a full report on each of them. For example, it will evaluate how well diversified your holdings are. Then it will consider how risky your current portfolio is, and whether you need to change anything to protect your financial future.
You will get advice for optimizing your portfolio completely for free. The analysis draws from a variety of different expert sources.
Vanguard has many exchange traded funds available for people to invest in. It's common for investors to use gold ETFs instead of investing fully in physical gold. There's nothing wrong with gold ETFs, but they serve a different purpose from physical gold.
When you buy physical gold, you're purchasing a specific product. It's a straightforward retail exchange. You see a coin, you get a price quote for the coin, you pay the price, you get the coin. If you use your retirement funds, then the coin is put into a depository instead of shipped to your house. But you can visit the depository and physically view your items whenever you want.
ETFs are a much more complex investment. They are supposed to be built with the potential for growth and diversification. As such, you don't have the straightforward transaction or retail experience. You need to have a basic understanding of the stock market in order to place your money in ETFs.
There is one advantage that ETFs have over physical gold, which is that there aren't storage fees. You aren't storing anything except a piece of paper that promises that you have a stake in some gold. So you don't need to worry about passively draining your funds over time.
Storage for physical gold, on the other hand, usually costs a minimum of $100 per year. It also depends on what storage services you use. Some people decide that they want to keep their holdings in a segregated vault, which is more expensive. Non-segregated vaults still have the same level of security, and they're audited by third parties. So you can still be fairly confident that your items are properly taken care of regardless.
Can You Open a Precious Metals IRA with Vanguard?
In order to answer this question, we need to define a "precious metals IRA."
Most people use this term to refer to physical gold and silver that is bought with retirement assets. This gold and silver is then stored in a depository and maintained by a custodian. When you decide that you want to take distributions, you can liquidate the bullion or have the gold shipped directly to you.
These investments have some advantages above other assets. Most commonly, people purchase gold as a hedge against inflation. The demand for gold also goes up when there are widespread economic issues. As people lose their trust in the banks and the markets, they turn toward a product that has been valuable for thousands of years.
There are also certain disadvantages. The metals won't earn any money in passive income, and there are ongoing fees to keep your storage vault open. But if you choose the right custodian and vault, these fees are often negligible.
Vanguard does not offer this type of IRA. Not only do they not offer physical gold IRAs, but they don't seem to sell gold at all. In fact, their website has a page where they talk about alternative investments. Precious metals are considered an alternative investment, more specifically a commodity.
This page on the Vanguard website mentions that people often buy precious metals because they want to hedge against inflation. However, the page goes on to claim that the prices of gold and silver are too unpredictable to be considered a truly stable asset. We're not sure how much we agree with that, given the relative predictability of the market, but that's fair enough.
According to the Vanguard website, commodities trading is a highly specialized field. While Vanguard does sell traditional assets like stocks and mutual funds, they don't have any commodities available for purchase.
Global Capital Cycles Fund
One common asset in a retirement portfolio is a mutual fund. These funds can be used in both standard and self-directed IRAs, since they count as traditional investments. Vanguard has multiple mutual funds available to invest in, and investors reap the benefits of the purchases.
With a mutual fund, a group of investors will all pool their money together. The assets will be divided amongst different industries or companies, allowing for more potential for growth.
The only mutual fund that Vanguard offers related to the precious metals industry is the Global Capital Cycles fund. This is considered a high risk fund because it works with companies whose industry value often fluctuates. Comparatively, most people invest in gold for their retirement because they want a relatively low level of risk.
The minimum investment to get started is $3,000. That's lower than the investment requirement for many IRA companies to purchase physical gold.
According to the Vanguard website, the fund is focused on finding high risk opportunities with a high potential for reward. It focuses on industries that fluctuate often because of investors either not investing enough or investing too much. By predicting these cycles, the goal is to invest when the price is low and sell when the price is high.
There is a minimum of 25% of the funds being put into physical precious metals, along with mining securities. Getting involved with mining companies is a good way to be invested in the precious metals industry without buying actual physical metals.
But the fund isn't just focused on precious metals. It also looks for companies that have good infrastructure, like telecommunications and utility companies. When the infrastructure is considered vital to society, the company itself is vital. This helps to mitigate some of the risk.
However, the summary does explain the many risks that are being taken on. There is the typical stock market risk, with stocks being liable to fluctuate rapidly. But there are also risks based on country and currency. Vanguard recommends that people only invest in this fund if they are looking for long-term investment in global equity, and who have a high risk tolerance.
The fund's performance is public knowledge. You can view all of the real-time data regarding their gains, returns, distributions, and other financial data.
There aren't any mutual funds or other investments with Vanguard that focus 100% on the precious metals industry. Vanguard does not appear to have much interest in said industry, and they make no secret of this. If you want to invest in a gold IRA, you'll find other opportunities with specialist businesses.
Advantages of Physical Gold Ownership
Despite the risks involved with buying gold, there are multiple advantages to this type of investment. It's important to consider not just the risks, but also the potential benefits.
One of the advantages is that gold is a tangible asset. It takes up physical space. Sure, that means that you need to pay for storage, but it also means that the asset can't simply disappear. Stocks can vanish overnight if a company goes bankrupt. Cryptocurrency can vanish overnight, too, even though it's touted as a great alternative asset.
Precious metals do share some traits with cryptocurrency. Most notably, they are decentralized assets. You can liquidate them for cash basically anywhere on Earth, and it's easy to look up the value of gold on a minute by minute basis. But it's difficult to trace the buying and selling of gold. In addition, if you store the gold in a private vault, then it's outside of the government's reach.
Precious metals have been traded globally for thousands of years, and mining is an industry that spans centuries. Entire towns have been created based around mines. There are still mining operations alive and well today, with some mining companies publicly trading shares on the stock market.
The main idea behind a gold investment is that you will have some protection if the economy collapses. Because demand for gold will go up, the value will rise. You can liquidate your gold holdings and live off of that income until the economy stabilizes again. Investors recommend putting a small portion of your portfolio into gold, but you shouldn't convert the whole thing.
Pros & Cons of Vanguard Precious Metals
Our favorite pick for an alternative gold investment company is Goldco. They actually have physical gold that you can buy, both with IRA funds and with cash. Their employees work with you one-on-one to establish your account and make sure that you're getting the best possible products for your plans.
We're also big fans of Augusta Precious Metals, which has customer service that rivals Goldco's. Augusta is known for being a hub of knowledge. Their employees are divided into different sections that all have a niche area of expertise. You'll find endless resources on the website including articles, blog posts, and videos.
American Hartford Gold is our third top choice. This company has many of the same policies and the same great reputation as Augusta and Goldco. But it is much more affordable to get started, since you don't have to meet any investment minimums. AHG is also friendly and does a variety of neat promotions for new investors. You can ask about whether you're eligible for any promotional offers when you talk to your representative.
Vanguard is an excellent investment company that has many investment opportunities. There are tons of mutual funds, stocks, and other choices available. The vast majority of the company's offerings can be held in a standard IRA with an investment manager. But Vanguard does not sell the alternative assets that can only be kept in a self-directed IRA.
This means that you won't find any physical gold for sale here. You'll need to work with an actual gold investment company to purchase bullion. We recommend Goldco, especially for their retirement services. They're great at connecting clients to the custodians and items that suit them best.
There is only one Vanguard item that is related to precious metals at all. It is a global fund that aims to create an opportunity for major growth. But as with any potentially high-reward endeavor, there are major risks involved. Global instability can play a massive role in the value of the investments, as can stock market fluctuations.
The fund isn't specifically designed for precious metals. Instead, it is designed to focus on industries whose value fluctuates a lot. Precious metals fit the description, so at least one-fourth of all of the assets are put into mining companies and the metals themselves. But the majority of the funds go to essential companies like electric and water companies.
Vanguard considers physical gold to be a risky investment, which is part of why they don't sell it. But there are advantages to buying gold for your retirement account. So if you're worried about the global economic situation, it could be a good idea to invest. Just make sure that you work with a company that knows the ins and outs of the industry.