Gold is one of the oldest forms of investment known to man, and for good reason: they just aren’t making anything out of it. When the last gold mine has been explored and mined, there will be no more precious metals to buy, sell and store. Accordingly, gold’s scarcity has made it a reliable investment for hundreds of years, and it’s not likely to stop anytime soon.
That said, like any other type of investment, there are better times to invest in gold than others. While gold can be helpful in most economies — and for most investors — there are some good times to start and others when you might consider putting your money elsewhere. To get the most out of a gold investment, however, it helps to understand both ends of the spectrum.
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2 times you should invest in gold
Here are two:
In times of inflation or economic uncertainty
If you’ve seen gold on the news or on television, it’s easy to understand why. Gold is often seen as. And as inflation has been higher than it has been in years, more investors are turning to the yellow metal to protect their larger portfolios.
Overall, in times of inflation or economic uncertainty, investing in gold can be worthwhile. In fact, this may be the best time to invest in gold. look at Nasdaq Data for confirmation. For example, in the 1970s, average interest rates started at around 6% but ended up at around 14%. While there was bad news for the broader economy, the price of gold rose from $35 to $850 per share during the same decade.
Although gold can help in hard times, just make sure to do it right. In particular, most experts recommend limiting the gold portion of your portfolio.
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When you’re doing it for the long haul
There are some investments that can make you money fast. Gold is not one of those investments. Instead, you’ll want to stick with it for the long haul to get the most out of gold. The more gold you hold, the more value you get – though that value won’t come overnight.
“10 ounces of gold bought 23 years ago in 2000 would have cost about $2,800,” Mel Mattison, CFP, financial services professional and consultant, said recently.. “Now, a baby born then would have about $20,000, probably enough for a down payment on a starter home.”
That’s not to say you might not benefit from some short-term gains in a few months or a few years with gold (you might). Just as good off as you areReally reap the golden rewards.
2 times you should not invest in gold
Here are two times you should consider investing in alternatives:
When you are looking to make money fast
As mentioned above, gold is better as a way to make money in the long term (think years) than some other investments. On the other hand, if you want to make a quick buck, consider skipping gold and putting your money in stocks and bonds. Gold, after all, is a consideration, or a way to protect what you’ve already achieved — not grow it fast overnight. If you invest in gold with that desired outcome, you may lose money.
When you are planning to retire soon
. But if you’re planning to retire in the near future, you can keep your money liquid or put it into something where you can more reliably earn quick income. As mentioned above, gold acts primarily as a security and secondarily as a long-term way to grow your money. If you don’t need protection and can’t wait for growth to produce any tangible results before retirement, consider skipping the precious metal for something else.
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With so many investments to choose from and different timeframes to achieve one’s goals, gold isn’t for everyone. If you decide to invest, there are some better times to start than others. It can be an important source of financial protection for your portfolio in times of inflation and economic uncertainty. And if you want a safe and stable growth path, gold can help your money grow long-term. However, as with all investments, you may want to strongly consider other options. In particular, you probably shouldn’t invest in gold when you want to make a quick buck or when you’re planning to retire soon and need a more liquid investment that’s readily available.