Background Research is Essential
The Commodities Futures Trading Commission (CFTC) is cautioning investors to exercise caution when it comes to artificial intelligence (AI)-created algorithms that promise extraordinary returns on crypto asset investments. The CFTC advises investors to conduct thorough background research on the companies or individuals offering such AI-driven trading algorithms.
Rising Concerns Over AI Scams
The CFTC has identified various AI-driven software, including crypto-asset trading schemes, trade signal strategies, and automated trading algorithms, as tools used by scammers to target unsuspecting investors. In an advisory issued by the CFTC's Office of Customer Education and Outreach (OCEO), the commission expresses its concerns about the increasing number of cases where criminals exploit the AI hype to defraud users.
Social Media and Influencer Impact
The commission highlights the additional challenge of scammers spreading false information through social media platforms and influencers. Unlike traditional media or advertising firms, influencers and social media platforms are not subject to regular marketing or advertisement regulations. To combat this, the CFTC advises investors to take specific precautions before committing their funds.
Precautions for Investors
Investors are advised to conduct thorough background research on companies or traders offering AI-based investing or trading bots. It is important to assess the trading history of the company selling AI-created algorithms. Additionally, seeking a second opinion and understanding the associated risks are crucial steps to protect investments.
The OCEO Director, Melanie Devoe, explains that the advisory aims to caution investors about the hype surrounding AI. She warns that AI has become a breeding ground for fraudulent activities, targeting unsuspecting investors.
Identifying and Avoiding Scams
The CFTC advisory not only warns investors about investment schemes that promise above-average or guaranteed returns but also helps them identify and avoid potential scams. The advisory serves as a reminder that no technology, including AI, can accurately predict the future.
What are your thoughts on this story? Let us know in the comments section below.
Frequently Asked Questions
How much tax is gold subject to in an IRA
The fair market value of gold sold is the basis for tax. When you purchase gold, you don't have to pay any taxes. It's not considered income. If you sell it later you will have a taxable profit if the price goes down.
You can use gold as collateral to secure loans. Lenders look for the highest return when you borrow against assets. In the case of gold, this usually means selling it. This is not always possible. They may hold on to it. They may decide to resell it. In either case, you risk losing potential profits.
In order to avoid losing your money, only lend against your precious metal if you plan to use it to secure other collateral. You should leave it alone if you don't intend to lend against it.
Should You Invest in Gold for Retirement?
This will depend on how much money and whether you were able to invest in gold at the time that you started saving. If you are unsure of which option to invest in, consider both.
Gold offers potential returns and is therefore a safe investment. This makes it a worthwhile choice for retirees.
Gold is more volatile than most other investments. Because of this, gold's value can fluctuate over time.
However, this does not mean that gold should be avoided. This just means you need to account for fluctuations in your overall portfolio.
Another advantage of gold is its tangible nature. Gold is less difficult to store than stocks or bonds. It's also portable.
You can always access gold as long your place it safe. Additionally, physical gold does not require storage fees.
Investing in gold can help protect against inflation. As gold prices rise in tandem with other commodities it can be a good hedge against rising cost.
You'll also benefit from having a portion of your savings invested in something that isn't going down in value. Gold rises in the face of a falling stock market.
Investing in gold has another advantage: you can sell it anytime you want. As with stocks, your position can be liquidated whenever you require cash. It doesn't matter if you are retiring.
If you do decide to invest in gold, make sure to diversify your holdings. Do not put all your eggs in one basket.
Don't purchase too much at once. Start small, buying only a few ounces. Then add more as needed.
It's not about getting rich fast. It is to create enough wealth that you no longer have to depend on Social Security.
Although gold might not be the right investment for everyone it could make a great addition in any retirement plan.
Is it a good idea to open a Precious Metal IRA
It is essential to be aware of the fact that precious metals do not have insurance coverage before opening an IRA. There are no ways to recover the money you lost in an investment. This includes losing all your investments due to theft, fire, flood, etc.
Investing in physical gold and silver coins is the best way to protect yourself from this type of loss. These coins have been around for thousands and represent a real asset that can never be lost. These items are worth more today than they were when first produced.
Consider a reputable business that offers low rates and good products when opening an IRA. It is also a smart idea to use a third-party trustee who will help you have access to your assets at all times.
Remember that you will not see any returns unless you are retired if you open an Account. Remember the future.
What are some of the advantages and disadvantages to a gold IRA
An Individual Retirement account (IRA) is a better option than regular savings accounts in that interest earned is exempted from tax. An IRA is a great way to save money and not have to pay taxes on the interest you earn. This type of investment has its downsides.
You may lose all your accumulated savings if you take too much out of your IRA. The IRS may prevent you from taking out your IRA funds until you reach 59 1/2. If you do withdraw funds from your IRA you will most likely be required to pay a penalty.
A disadvantage to managing your IRA is the fact that fees must be paid. Most banks charge 0.5% to 2.0% per annum. Others charge management fees that range from $10 to $50 per month.
If you prefer to keep your money outside a bank, you'll need to purchase insurance. Most insurers require you to own a minimum amount of gold before making a claim. You might be required to buy insurance that covers losses up to $500,000.
If you choose to have a gold IRA you will need to establish how much gold to use. Some providers limit how many ounces you can keep. Some providers allow you to choose your weight.
It is also up to you to decide whether you want to purchase physical gold or futures. Gold futures contracts are more expensive than physical gold. However, futures contracts give you flexibility when buying gold. Futures contracts allow you to create a contract with a specified expiration date.
It is also important to choose the type of insurance coverage that you need. Standard policies don't cover theft protection, loss due to fire, flood or earthquake. It does offer coverage for natural disasters. You might consider purchasing additional coverage if your area is at high risk.
Insurance is not enough. You also need to think about the cost of gold storage. Storage costs are not covered by insurance. Safekeeping costs can be as high as $25-40 per month at most banks.
To open a IRA in gold, you will need to first speak with a qualified custodian. A custodian is responsible for keeping track of your investments. They also ensure that you adhere to federal regulations. Custodians aren't allowed to sell your assets. Instead, they must retain them for as long and as you require.
Once you've decided which type of IRA best suits your needs, you'll need to fill out paperwork specifying your goals. Information about your investments such as stocks and bonds, mutual fund, or real property should be included in your plan. You should also specify how much you want to invest each month.
Once you have completed the forms, you will need to mail them to your provider with a check and a small deposit. The company will review your application and send you a confirmation letter.
If you are thinking of opening a gold IRA for retirement, a financial professional is a great idea. A financial planner can help you decide the type of IRA that is right for your needs. They can also help you lower your expenses by finding cheaper alternatives to purchasing insurance.
What's the advantage of a Gold IRA?
There are many benefits to a gold IRA. It's an investment vehicle that allows you to diversify your portfolio. You have control over how much money goes into each account.
You have the option of rolling over funds from other retirement account into a gold IRA. This allows you to easily transition if your retirement is early.
The best part about gold IRAs? You don't have to be an expert. They are offered by most banks and brokerage companies. Withdrawals can be made instantly without the need to pay fees or penalties.
However, there are still some drawbacks. Gold is known for being volatile in the past. Understanding why you invest in gold is crucial. Are you seeking safety or growth? Is it for security or long-term planning? Only after you have this information will you make an informed decision.
If you plan to keep your gold IRA indefinitely, you'll probably want to consider buying more than one ounce of gold. A single ounce will not be sufficient to meet all your requirements. Depending upon what you plan to do, you could need several ounces.
You don't have to buy a lot of gold if your goal is to sell it. Even one ounce is enough. You won't be capable of buying anything else with these funds.
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- Contribution limits$6,000 (49 and under) $7,000 (50 and up)$6,000 (49 and under) $7,000 (50 and up)$58,000 or 25% of your annual compensation (whichever is smaller) (lendedu.com)
- The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (aarp.org)
- (Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (smartasset.com)
- Saddam Hussein's InvasionHelped Uncage a Bear In 1991 – WSJ
- Are you interested in keeping gold in your IRA at-home? It's Not Exactly Legal – WSJ
- 7 U.S. Code SS 7 – Designation of boards of trade as contract markets
- 26 U.S. Code SS 408 – Individual retirement account
- Yahoo Finance – Barrick Gold Corporation Stock Price, News & Quote – Barrick Gold Corporation (GOLD).
Investing gold vs. stocks
This might make it seem very risky to invest gold as an investment tool. This is because many people believe gold is no longer financially profitable. This belief is based on the fact that gold prices are being driven down by global economic conditions. They believe they would lose their money if they invested gold. In reality, however, there are still significant benefits that you can get when investing in gold. Let's take a look at some of the benefits.
Gold is one of the oldest forms of currency known to man. It has been used for thousands of years. It was used by many people around the globe as a currency store. Even today, countries such as South Africa continue to rely heavily on it as a form of payment for their citizens.
Consider the price per gram when you decide whether you should invest in or not. If you're interested in buying gold bullion, it is crucial that you decide how much per gram. If you don’t know the current market rate for gold bullion, you can always consult a local jeweler to get their opinion.
It is important to remember that even though gold prices have dropped in recent times, the cost of making gold has risen. So, although gold prices have declined in recent years, the cost of producing it has not changed.
You should also consider the amount of your intended purchase when considering whether you should buy or not. It makes sense to save any gold you don't need to purchase if your goal is to use it for wedding rings. However, if you are planning on doing so for long-term investments, then it is worth considering. Selling your gold at a higher value than what you bought can help you make money.
We hope this article helped you to gain a better appreciation of gold as a tool for investment. We recommend you do your research before making any final decisions. Only then will you be able to make an informed decision.
By: Terence Zimwara
Title: The Commodities Futures Trading Commission Warns Investors of Dubious AI-Driven Crypto Asset Schemes
Sourced From: news.bitcoin.com/ai-hype-cftc-urges-investors-to-be-wary-of-ai-created-crypto-asset-arbitrage-algorithms/
Published Date: Sun, 28 Jan 2024 08:30:23 +0000