Can I contribute bullion or coins I already own into a self-directed IRA?

No.  All contributions must be made in cash, except in the case of transfers and rollovers.

Can I hold the precious metals myself?

No, IRS regulations require that the metals be held by an approved depository. Even GoldStar cannot hold the metals; consequently, GoldStar has arranged for HSBC Bank USA's precious metals depository to secure the metals.

What is the maximum IRA contribution for 2008?

The maximum contribution for 2008 is $5,000. However, taxpayers age 60 or older may contribute $6,000 annually. If you question the amount you may contribute, check with your tax adviser."

When can I make my IRA contribution?

You may make your IRA contribution anytime during the year for which you claim the deduction, or during the following year before you file your income tax form. If you file for an extension, you must make your contribution on or before April 15th of the following year.

Why should I buy precious metals such as gold, silver, platinum, and palladium?
 
Diversification is a good reason and is the cornerstone of a solid investment portfolio. Until the mid-1990s, when stocks started producing fabulous profits, most investment advisors recommended balanced portfolios, with mixtures of stocks, bonds, and precious metals.

Stocks provide the opportunity for growth; bonds produce income, and precious metals protect against inflation and financial chaos. But, as the stock market climbed onward and upward, caution was thrown to the wind. Stocks came to dominate most portfolios, pushing bonds to the back burner and precious metals out of the picture. Now appears to be a prudent time to return to a portfolio weighed heavily toward precious metals, as discussed below.

The second reason for buying precious metals is that their prices are inversely related to stock prices. That is, when stock prices go up, precious metals prices go down. This has certainly been the case over the last fifteen years. Likewise, the charts show that when stock prices go down, precious metals prices tend to rise.

Will Equities move down to their mean and will gold move up?

The graphs also illustrate that stocks and gold revert to their means, middle points between extremes. During the 1990s, stocks went to extremes on the upside, and gold went to extremes on the downside. In 2000, stocks headed into a correction that lasted three years, and gold (and silver) put in bottoms in their long bear markets.

With stock action signaling that the great bull market of the 1990s may be over, precious metals could be the next bull markets. Adjusted for inflation, precious metals prices are at record lows. Although most high tech and dot-com stocks have suffered severe losses, many "old economy" stocks still enjoy big gains. Now could be a good time for investors to switch from stocks to precious metals, especially in their IRAs.

Which should I buy, gold coins or gold stocks?
 
Instead of gold or silver bullion, many investors opt for precious metals mining stocks because they normally yield higher percentage increases than gold and silver when metals prices rise. However, investing in precious metals stocks carries risks beyond buying gold or silver bullion.

The risks are many and varied, and sometimes unforeseen problems can send stock prices plummeting, which, of course, is true of all stocks. Management mistakes cause most mishaps. With precious metals and other mining stocks, the sizes and grades of ore deposits can be over-estimated or the cost of extracting the ore can be greater than expected, resulting in lower profits or even losses.

Additionally, businesses always struggle with economic downturns, interest rate increases, labor troubles, governmental interventions, and environmental requirements. Increases in energy costs--even energy shortages--could plague some mining companies.

Precious metals stocks are a way to participate in the gold and silver market; however, compared to precious metals bullion, stocks are risky. No one ever went broke holding gold or silver. The same cannot be said of paper assets.

If you want to discuss establishing IRAs with GoldStar Trust Company, call Silver Trading Company at 318-470-7291. If, after getting your questions answered, you want to proceed, Silver Trading Company will mail you a GoldStar Trust information packet, which includes an application and other necessary forms.