3 Reasons You Should Invest in Gold, According to Professionals

Gold has been in the news a lot lately, with headlines highlighting everything from gold rallies to gold rushes. It’s not surprising. Investors often turned into gold In times of economic turmoil, and there’s no doubt we’ve endured our fair share of turmoil in recent years.

from Increase in interest rates And High inflation per Bank failure And Talk about recession, there are plenty of reasons for investors to seek a safe place for their money. But why gold? And is it worth the hype it’s getting? We asked the experts for their take.

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3 Reasons You Should Invest in Gold, According to Professionals

There are many here Reasons to Invest in Gold. Here are three that experts often mention.

It can protect you from inflation

“Gold can be an advantage because it can hedge inflation,” said Stuart Boxenbaum, CFP and president of Statewide Financial Group. “Inflation doesn’t seem to be slowing anytime soon. One of the few assets you can own with inflation is precious metals, including gold.”

gold standard have been historically stable relative to other assets, and when inflation is high, Gold prices are often high. This can make a smart addition to your portfolio when prices of goods and services tend to rise.

“Investing in gold is a prudent way to protect your wealth from the adverse effects of inflation,” says William Bevins, CFP, CTFA. “As an excellent option for storing wealth, gold has consistently proven to be a reliable and effective asset over the years. The value of the dollar can be weakened by inflation, but gold gives you an edge to combat declining purchasing power.”

There are many here Ways to invest in gold. Boxenbaum noted Gold IRA As a common way to invest in gold as an inflation hedge.

“The good news with gold IRAs is that they can be set up directly with specialized companies that have custodians who are responsible for gold/precious metals and tax reporting (IRS) requirements.” Boxenbaum said

It also diversifies your portfolio

diversity A strategy where you spread your investments across different asset classes to maximize returns and minimize risk. This is especially valuable when the economy is in turmoil.

“As the economy continues to shift and change, many investors are looking for ways to diversify their portfolios and protect themselves from potential losses,” said Hannah Horvath, CFP. “Gold has been used as a currency and store of value for thousands of years, and has proven to be a reliable hedge against inflation and economic instability. By adding gold to your investment portfolio, you can help protect your wealth from market volatility and potentially Currency Depreciation.”

Although the price of gold may fluctuate in the short term, it is relatively impervious to market changes in the long term. As a result, it provides balance towards more volatile assets, viz stock.

“Gold generally behaves inversely related to the stock market,” Bevins says. “As a result, when the stock market goes down, gold prices often rise. Investing in gold can be a great way to add stability and diversification to your portfolio, providing some measure of protection against potential market events.”

It does well when investor confidence is shaken

“Precious metals like gold typically thrive in environments fraught with uncertainty, be it geopolitical or financial,” Bevins said. “Gold can become attractive during times of financial stress, such as low stock market confidence or problems within the banking system.”

We have recently seen this following Fed’s March Minutes Release. Spot gold rose to $2,042.49 an ounce after news of a “mild bearish” hit, according to Reuters – 2020 recession nears record high set. Gold futures Also increased, $2,056.90.

In fact, says Noah Damsky, CFA and principal of Marina Wealth Advisors, “gold’s best use is not as a hedge against inflation but as a hedge against panic and fear.”

“It can perform well in an inflationary environment,” Damsky explains, “but it tends to do best when equities [stock] The market quickly sold off. Equity market sell-offs can come from a slowdown in growth, which is often accompanied by a lack of inflation, so it can work best when there is a flight to safety and a controlled inflation environment.”

If you’re thinking about investing in gold, request a free investor kit today to learn more.

Bottom line

While experts may differ on the best uses of gold, their advice has one thing in common: Regardless of the economic climateGold can add stability to your investment portfolio.

Of course, as with any resource, make sure you understand Pros and cons of gold Time to decide if you should invest in it. “Investing in gold may not be for everyone,” Horvath says, “but it’s definitely worth considering as a smart and knowledgeable part of your long-term investment strategy.”