Gold, collectibles and other alternative investments

WHAT THEY ARE

1. Investments outside stocks and bonds

• Gold and other precious metalsCoins and bullion
• CollectiblesArt, rare coins, watches, cards
• They don't pay interest or dividendsYou only gain if you sell for more

THE RISKS

2. Why they're tricky

• Prices can swing a lotAnd there's no guarantee
• Dealer markups can be highYou may pay well above the metal's value
• Hard to sell fastStorage and insurance cost money too

TAXES

3. Collectibles are taxed differently

• Gains on collectibles can be taxed up to 28%That's the IRS maximum rate
• Coins and art count as collectiblesKeep records of what you paid
• A CPA can explain your situationBefore you sell

Source: IRS.

IN AN IRA?

4. IRAs have special rules

• Buying a collectible in an IRA counts as a distributionThat can mean taxes and penalties
• Some coins and bullion are exceptionsWith strict storage rules
• Be wary of pushy "gold IRA" pitchesAsk about every fee

Source: IRS.

QUESTIONS TO ASK

5. Before you buy

• What are the markup and the fees?
• How would I sell it, and how fast?
• How much of my money is this?
• Check any advisor on FINRA BrokerCheck

Educational only, not financial advice. Talk to a fee-only fiduciary or CPA about your situation.