How to Invest in Gold According to Experts

between Persistent inflation, Bank closed and a Ahead recession, many Americans are reviewing their investments to make sure they keep pace with economic changes. One investment to consider is gold, often seen as a store of value during times of geopolitical and economic uncertainty. Historically, gold can also act as a hedge against inflation and help you Your portfolio is diversified.

But if you’re new to precious metals investing, figuring out how to invest in this asset can be challenging. That’s why we’ve gathered advice from leading gold experts to help you understand how to invest in gold and avoid common pitfalls.

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Why invest in gold?

“Gold has been used as a store of value and a medium of exchange by mankind for nearly 5,000 years,” said Chris Battifarano, chief investment officer at Finemark National Bank & Trust. “There is no obvious reason to change that.” The government cannot change the quantity of gold with fiat currency.”

This store of value can also act as a Hedge against inflation. “Gold has generally provided some protection against sustained high inflation – above 5% a year over at least a two-year period – and against significant weakness in equities and the US dollar,” said George Milling-Stanley, chief gold strategist at State Street Global Advisors.

Although our experts have provided a lot Beneficial Reasons to Invest in Gold, almost all point to investment portfolio diversification as the primary benefit of gold “Gold exhibited little correlation to other assets found in a typical balanced portfolio, so it provided an important element of diversification,” says Milling-Stanley, a 50-year veteran of the gold industry.

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How do you invest in gold?

There are different ways Invest in goldIncluding buying and investing in physical gold bars and coins Gold Individual Retirement Accounts (IRAs) And Gold Exchange-Traded Funds (ETFs).

“The best way to invest in gold is a very personal decision,” says Michael Ashley Shulman, CFA partner and chief investment officer at Running Point Capital Advisors. “Gold ETFs are a convenient way for beginners to invest in gold with low friction costs and without the complexities of physical storage or futures trading. However, if one desires gold Armageddon protection, owning it may be the preferred option.”

Gold IRA Can help diversify your retirement portfolio. These accounts work similarly to traditional IRAs but allow you to hold physical gold and other permitted precious metals. Gold IRAs offer tax-deductible contributions with tax-free withdrawals, along with self-directed gold IRAs or Roth gold IRAs.

When it comes to gold IRAs and other types of gold investments, Milling-Stanley stresses the importance of due diligence. “Investors must satisfy themselves, and any professional advisors they consult, as to the suitability of a particular gold IRA and product providers.”

“An ETF on gold miners and explorers can be a compelling, efficient option,” added Rohan Reddy, director of research at Global X. “This is because investors have the opportunity to gain exposure to the broader gold mining sector and various companies involved in gold exploration.”

How to avoid beginner mistakes

One of the biggest mistakes gold investors make is looking for short-term gains from a precious metal that is often considered a Long-term assets. “Gold investors should not try to predict short-term price changes for gold or any other investment asset,” advises New Frontier Advisors CIO Robert Michwood. “The nature of markets is that prices reflect currently known information, so investors should focus on having an appropriate portfolio for the long term.”

Another common mistake Gold investment, like any other type of investment, fails to consider the risks involved. It is important to educate yourself and consider the potential pitfalls rather than the benefits of owning gold.

Shulman noted that “risks include price fluctuations, insurance and storage costs for physical gold, geopolitical risk and risks associated with certain investment vehicles such as futures or mining stocks.”

Bottom line

Given the state of the economy, including a possible recession in 2023, it may make sense to consider adding a piece of gold to your portfolio. Milling-Stanley notes “There have been seven significant recessions in the United States over the past 50 years. During each of these seven recessions, gold’s average annual price increase was more than 20%.” Although gold has a strong performance record during recessions, be aware that past performance does not guarantee future results.

Experts generally advise not to invest more than this 5% to 10% of your portfolio in gold and other precious metals. Consult your financial advisor or accountant and consider your risk tolerance before investing to ensure assets are consistent with your overall investment strategy. Get started by requesting a free information kit to learn more about this unique investment opportunity.