A gold IRA rollover is a wonderful way to add diversification and protection to your investment portfolio. When people are told this their typical reaction is to first ask what a gold IRA is?

In essence a gold IRA is the same as any other individual retirement accounts. The only difference between a traditional IRA and this type is that you will be investing into physical gold, instead of stocks. A rollover is when you take some or all of the money in your IRA and transfer into a different IRA.

Why do a rollover?

You do not necessarily need to do a rollover. You could certainly just open up a gold IRA and start putting you money into it, but that is a strategy that really only makes sense if your current IRA does not have a lot of money in it.

Say for example you just recently opened one up and deposited $1,000 into it. From a retirement perspective this is a relatively small sum of money. Rather than doing a rollover it would make sense to just start depositing money every month into a gold IRA until the desired level of diversification is met.

However, let's say that the IRA has close to $10,000 in it. This is a substantial amount of money and if it is all invested in the stock market then it is greatly at risk from being lost due to market fluctuations. In this case a rollover is essential because the money needs to be rapidly diversified in order to hedge against these fluctuations.

A rollover is the fastest way to do this.

Because the money is being immediately transferred from one IRA to another there are no penalties associated with this transfer. If the money was instead withdrawn from the IRA and then put into gold, the investor would have to pay substantial penalties on that withdrawal.

Gold IRAs are wonderful because gold is historically one of the most stable assets that a person can invest in. The value of gold will never be at zero. The same cannot be said for any traditional stock. A business, no matter how large, is always one bad decision or disaster away from utter ruin. Gold has continued to rise for decades. In fact year-over-year it always goes up.

It just makes good financial sense to invest some of your money into a gold IRA.