4 times gold can help your portfolio the most

Following are the rising months Worries about a recessionCoupled with rising interest rates, inflation and other economic uncertainties, it’s no wonder that many investors are turning to gold. Precious metals have been a The field of moral education For centuries, and this year has already seen an increase in value.

But if you’re thinking of investing in gold, it might help to consider it Long term value For your portfolio. Whether you decide to invest in physical gold bullion, gold ETF shares or one Retirement Focused Gold IRAGold is a safe form of investment that you can benefit from over time.

As with any asset, there are times when your gold investment can enhance your portfolio more than others. Below, we’ll go over a few times when you can get the most out of investing in gold. Explore your options for investing in gold here with a free information kit

4 times gold can help your portfolio the most

The ebb and flow of the market means that your Gold investment Can help you at different points in your investment timeline than others. Here are some times it can help the most:

When the value of the US dollar falls

Gold, historically, is seen as a good Hedge against inflation. When the value of the US dollar falls as inflation reduces its purchasing power, the price of gold often rises.

A prime example is inflation in the 1970s. Over a decade, the inflation rate averaged about 7%. Meanwhile, gold prices rose from around $35 an ounce at the start of the decade to above $600 by the early 1980s. World Gold Council — far outstripping inflation during that time. Even today, The price of gold has increased In the past year. This is a steep climb though Doesn’t last foreverHolding a portion of your portfolio in gold can pay off over time during periods of inflation.

Learn more about how you can benefit from investing in gold today with a free investor kit.

during recession

When the economy is weak, the value of gold rises; After all, it is seen as one safe haven. When investors want Add securityThey often buy into gold, increasing its demand and price.

“Rising gold prices could be a signal that the economy is struggling,” reads a report from Bureau of Labor Statistics Released after the Great Depression. “As a result, during a crisis or inflation, many investors turn to gold to protect their principal. Conversely, during times of economic stability, investors may turn to more speculative investments such as stocks, bonds, and real estate. During these times, the price of gold often falls. goes.”

Investment in gold Before the recession Can help your portfolio by keeping your overall investments relatively stable. Even if you lose money elsewhere, you may be able to weather the overall economic downturn with a portion allocated to gold.

When your other investments are volatile

Gold is also good diversifier Against recession in other markets. While it may not rise directly when the stock market or real estate market goes down, it doesn’t tend to go down alongside them either.

Gold often moves independently of other markets, so it is seen as one Good way to diversify. Take the 2022 market, for example. While the S&P 500 Ended the year down more than 19%The price of gold has been stable over the years, ending at the same price point as it started.

You won’t always see the big gains that other markets take during booms, but using gold as a diversifier can help maintain some stability as the economic environment changes.

When you have a long investment timeline

Thanks to all the above reasons, gold can be ideal if you have it Long investment horizon Before you.

Over the next few decades, the economy may experience any number of periods of inflation, recession and uncertainty — so you can benefit from gold every time. And with a longer time to invest, you can take on a little more risk anyway.

Experts generally recommend investing only around 5% to 10% in gold. Traditional stock and bond investments, along with other assets, are still important sources of growth. A small allocation to a stable asset like gold combined with other assets that can help you build wealth over the long term can be a good combination for a well-diversified portfolio.

Start learning more about how to add gold to your portfolio today with a free investment guide.

Bottom line

If you are considering Adding gold to your portfolioUnderstanding how an asset’s value changes over time and its benefits as a diversifier can help you Make the most of your investment. Periods of recession, inflation and overall market volatility are when gold can make the biggest difference. Also, if you have a long investment timeline, you can expect to experience a number of these periods in the decades ahead.

If you’re still unsure, consider talking to a financial advisor about whether gold is right for you and how much to invest. And to learn more about how to invest in gold, get started today with a free information kit.