Gold has been around for centuries, but it’s not a highly talked about investment. In previous centuries, gold was used as a currency, and it’s always been a sign of incredible wealth. Its long-standing value and demand shows its stability and safety, even during times of unstable economies.
If you’re not sure about investing in gold, check out the top reasons to consider it.
If you’ve invested in the market for any length of time, you’ve seen the ups and downs it goes through. It can be scary when you have your life savings or retirement savings invested – watching it decrease fast can cause panic and rash decisions.
Gold tends to hold its value because of its stability. Families pass it down from generation to generation when investing in the physical form of gold. Even if you invest in gold-related securities, they tend to hold their value better than traditional stocks.
The value of the U.S dollar fluctuates often, leaving you with buying power. This happens when we go into a recession, such as occurred from 2008 – 2012 when the value of gold rose significantly. What most people do when the value of the dollar falls is run to commodities like gold. This high demand sends the value of gold soaring, giving you an even greater return on your investment.
As the value of the dollar increases with inflation, so does the value of many of your standard investments. But, gold often hedges against that risk since its value moves with inflation. In other words, as inflation increases so does the value of gold. Most investors see gold as a stable investment, so when inflation occurs, many investors flock to gold.
Unlike many other investments that are affected by interest rate fluctuations, or printing (not printing) money to control the economy, giving it stable properties. Because gold typically keeps its value, many investors turn to it during times of uncertainty or when they don’t know what else to invest in.
Even if you aren’t worried about your portfolio or concerned about the economy, investing in gold helps diversify your portfolio. When you diversify, you decrease the risk of a total loss because of a declining economy or even political issues that affect the market. If you have all your eggs in one basket (investing in all stocks, for example), you stand to lose a lot more than if you diversified.
Consider including gold in your portfolio. Its stability and predictability make it a great addition to any portfolio. Whether you invest in it abstractly (via stocks) or physically, there are ways to protect your investment and ensure your portfolio can handle the ups and downs the market goes through.
With the right support and guidance, you can add gold and other precious metals to your portfolio giving your retirement savings a better chance of providing you with financial freedom.