Investing can feel pretty complicated. Everyone has an opinion about where you should put your money, why you should invest in company A or company B, and whether you should pay the fees for the advice that comes with a financial planner or invest with an algorithm-powered ETF.
When it comes to your money, you’re the only one who knows what’s right for you, but there are indicators that every investor should pay attention to when they’re choosing how to diversify their portfolios.
Investing in gold can introduce new risks and opportunities to your portfolio. Physical bullion is a unique asset, with a set of properties not shared by many other financial vehicles. Here’s when it makes sense to start including gold in your investment portfolio.
When Should You Invest in Gold?
1. You Want to Reduce Counter-Party Risks
When you’re looking for a safe place to put your savings, it can feel like there’s fraud all around. From the world’s largest energy companies like Enron to up-and-coming cryptocurrency firms like FTX, there are always going to be businesses that hoodwink investors and don’t live up to their claims.
Physical bullion, such as gold and silver coins and bars, does not have counter-party risk. When you buy it from reputable bullion dealers like Global Bullion Suppliers, you can be confident that you’re getting the real deal. You store physical bullion yourself, either in a home safe, a vault, or a safety deposit box. There’s no counter-party risk, and you can insure your investment against theft, fire, and other loss.
2. The Economy Is in a Recession
A recession can cause lasting damage to your portfolio. When stock markets take a nosedive, it can put your savings goals back by years. As far as a long-term investment strategy goes, equities have a history of outperforming just about any other asset class. That said, while they offer the most growth, a recession can also lead to a major stock market correction and years of stagnant value.
When stock prices are down, many investors shift more of their money into gold, driving prices and offering growth at a time when few other assets are appreciating.
3. You Want Lasting Wealth
Investing isn’t always just about preparing for retirement; it can also be about making sure your wealth remains valuable when it’s time to pass it along to your loved ones.
One of the properties that make gold such an attractive investment is that it’s a long-term inflation hedge and a hedge against a weak U.S. dollar. Its longevity is what makes it so appealing to the very wealthy who want to make sure that no matter what happens in the world, they can leave something behind.
Gold has been a vehicle for storing wealth for thousands of years, and there is a level of trust that comes with that kind of history.
If you want to make sure that you can leave behind an estate with stable value, gold is one tool that you can include to help make it happen.
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