Times of economic uncertainty and high inflation understandably cause stress. For American investors, this can lead to a closer examination of their finances and long-term goals. It could also lead to a re-evaluation of their stocks and retirement plans.
With inflation remaining stubborn and fears of a recession rising, some investors may be looking at unconventional ways of saving. While gold is one of the oldest investments known to man, its value can often be underestimated. But with the current economic forecast unclear, it may be worth pursuing as an additional way to save and diversify.
A gold expert can help you get started today with a free wealth protection kit.
2 reasons to invest in gold now
While the benefits of investing in gold are multiple, here are two timely reasons investors may want to act now.
To help with inflation
Core inflation, which tracks average price increases (minus energy and food costs) jumped 6.6% in the last year, its highest rate since 1982. And stocks have plummeted amid signs that the Fed is planning additional rate hikes. Trillions in retirement savings have been affected.
In this environment, investors may be looking for every advantage they can gain in the fight against inflation. Gold could potentially soften the blow of inflation by acting as a hedge.
“A rise in inflation or inflationary expectations increases investors’ interest in purchasing gold and, therefore, drives up its price; in contrast, disinflation or a drop in inflationary expectations does the opposite,” the Federal Reserve Bank of Chicago explained.
“Inflation occurs when the value of the dollar or another currency declines, usually because governments print too much money,” a Money.com report notes. “By contrast, gold has been seen as valuable for thousands of years, and its supply is fixed by miners’ ability to pull it from the ground.”
Research from the World Gold Council notes that when the inflation rate starts to outpace the interest rates (as we are currently experiencing) then commodities like gold may outperform some traditional financial assets.
Is gold “inflation-proof,” as some experts have historically suggested? That’s unlikely. Economic headwinds are unpredictable, especially as we begin to recover from the pandemic.
But, depending on your age, financial goals and other factors, gold may be worth pursuing as a hedge against inflation, even in small amounts.
So speak with a gold expert today and see how you may benefit.
To diversify your portfolio
With inflation here for the foreseeable future, the old way of doing things may need an overhaul. This applies to food shopping, utility use, and, yes, even the way people save and invest.
This is not to say that you should shift all your investments into gold. Or even most of them. But a wider diversification can help.
Edward Karr, the founder of U.S. Gold Corp., recently told CBS News that just a small percentage dedicated to gold mining equities or physical gold could potentially help “reduce an overall portfolio’s risk and potentially increase the long-term returns.”
“When the S&P 500 fell around 30% between November 2008 and March 2009, the price of gold was up by about the same amount,” a Money.com report notes. “This makes owning some gold, alongside stocks and bonds, a way to diversify your investment portfolio.”
This doesn’t mean that every investor should diversify their portfolio with gold. It may make more sense for young people than older investors who have less appetite for risk.
But personal financial circumstances are different for everyone. That’s why it helps to speak to a gold expert who can help.
The bottom line
The current U.S. economic outlook is uneven. Accordingly, investors may want to review all of their current and, potentially, future savings vehicles.
Gold could be a good place to start. Find out more now.
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