We begin with the 1970s, when the US Congress passed the Employee Retirement Income Security Act (ERISA), which included among its provisions the Individual Retirement Account (IRA). The IRA was intended to help workers save for retirement using their own tax-deferred, personal investment accounts, available through commercial financial institutions. In addition, when changing jobs workers would now be able to retain their employer-sponsored retirement plan assets by allowing them to transfer, or "roll-over" their plan balances into IRAs.

Since that time, the IRA and other so-called "self-directed" personal retirement plans, like the 401K, have been altered so as to provide a greater variety of investment opportunities. For example, in 1986 the US tax code was amended to allow IRAs to contain American Eagle Gold and Silver coins, in addition to fixed income, equities, money market investments and real estate investment trusts (REITS).

Why is it critical to incorporate a precious metal component in your retirement investment portfolio? The principal reasons:

1. The market prices of precious metals and those of stocks and bonds tend to move in opposite directions. Studies show that portfolios containing even minimal amounts of precious metals exposure will experience less overall volatility and greater long-term returns than those missing the precious metals piece.
2. Precious metals are tangible assets which, unlike stocks and bonds, have their own innate value.
3. Once you retire the account, you may pay income taxes on it, but the market gains earned from precious metals investments are exempt from capital gains taxes. Remember the precious metals bull market we have been enjoying over the last decade (the price of gold has increased by an average of 38% + every year of it)!
4. Gains on precious metals in the US, including EFT's, held outside of an IRA are taxed at the 28% so-called "collectable rate", as compared to the capital gains rate of 15%. Obviously, this can mean ample savings for you and, especially in the current market, a big increase in your retirement investments over the life of the plan.

Every financial advisor owes it to his or her clients to explain the substantial advantages of adding a precious metals component to their portfolios.