Why is investing in gold beneficial?

There are many ways to invest in gold, from buying physical coins and bars to purchasing gold mining stocks, shares in gold ETFs and more. 

Given recent economic developments, not to mention high inflation and a volatile stock market, many investors are considering these options when deciding where to put their money. 

If you think you could benefit from investing in gold then start by requesting a free wealth protection kit to learn more about this unique investment opportunity.

Why is investing in gold beneficial?

Are you one of those people considering investing in gold? Here are a few ways it could help your portfolio:

It can help with inflation

With inflation currently sitting at 6.5%, gold has become an attractive investment for many. The precious metal has long been considered a good hedge against inflation since it tends to retain its value or even grow — even when the value of the dollar is declining.

“Gold is widely accepted as a hedge against inflation because its price is less vulnerable to market fluctuations and can maintain purchasing power during periods of soaring prices,” says Mina Tadrus, CEO of Tadrus Capital. “The metal holds up well against currency depreciation, as it tends to become more valuable due to rising demand relative to supply at higher inflation levels.”

Historically, he’s right: When inflation is high, investors tend to turn to gold and other safe-haven assets rather than other, more volatile vehicles — like stocks, for example. This helps them hold or even increase their value while the dollar continues to depreciate.

As the Federal Reserve Bank of Chicago explains, “Variation in inflation or inflationary expectations [is] the single most important consideration for the real price of gold.”

If you think you would benefit from the potential hedge gold can provide against inflation then start by requesting a free wealth protection kit now.

It can protect your wealth when other investments decline

Similarly, gold can be a smart place to park or even grow your wealth during troublesome economic times. 

As Tadrus explains, “Gold is sought after because of its durability, scarcity, beauty, liquidity and historic status as a store of wealth. Many turn to it as a safe asset in times of economic uncertainty.”

Often, gold investments even grow during economic downturns. According to the Bureau of Labor Statistics, gold’s value jumped 13% in a single year during the Great Recession. Coming out of the recession, it jumped another 50% “due to speculation surrounding an uneven recovery and volatility in the U.S. financial markets.”

It can help diversify your portfolio

Putting too much of your money in a single asset class means big risk. If that market takes a turn, you could lose significant amounts of money. With gold, you can effectively mitigate that risk, spread your money across different asset classes and enjoy a more diverse portfolio.

“Gold is a non-correlated asset compared to stocks and other investments, meaning it moves in the opposite direction of other investments,” says Chad Mitchell, savings and lending specialist at Metropolis Equity Holdings. “This can help to balance out a portfolio and provide protection against market downturns and volatility and reduce risk.”

Generally speaking, most experts recommend allocating no more than 5 to 10% of your portfolio to gold investments as an effective diversification method.

How to buy gold

In the long term, gold typically doesn’t deliver significant returns, so if you’re looking for a big wealth-builder, this asset probably isn’t it.

However, if you do opt to buy gold, choose your gold investment strategy wisely. 

There are many ways to go about it: You can buy stocks in gold-mining companies, purchase physical gold, invest in a gold IRA (which allows you to buy silver and other precious metals, too) or buy shares of gold ETFs. According to a study published in the Financial Analysts Journal, gold bullion ETFs deliver the best results, with returns of up to 76% over the 10-year period studied. 

You can get started investing in gold with Goldco now or use the table below to review some top gold providers.