Is gold investing risky? – CBS News

An economy still feeling the impact Inflation And High interest rates Investors’ appetite for additional risk and volatility is understandably low. While some investments may provide better returns than others, the inherent risk involved can be a strong deterrent, causing many not to engage. It may also cause some investors to question the level of risk and safety of other, lesser-known investments, such as gold.

Gold can be a smart investment for a number of reasons, although it also has its own risks that investors should be aware of when starting out. These risks are different from those associated with other investment types, so investors should first do their research to determine if this type is right for them. Get started by requesting a free investment guide here to learn more about this unique opportunity.

Is gold investing risky?

Gold investment, like any other investment, can be risky if done randomly or with the intention of getting rich quick. However, a gold investment can reap significant rewards in the long run. To get there, however, you’ll want to avoid the following wrong step:

Overinvestment

A gold investment should be considered something that will help your overall portfolio – not as something that makes up all or even most of it. Instead, experts recommend keeping your gold allotment 5% to 10% of your overall portfolio. Any more than that and you risk losing other income-producing investments like stocks and bonds. The latter two will be where you can increase your savings so that you have enough to work with after retirement. Meanwhile, gold will help stabilize your portfolio and stocks are less likely to fluctuate in value. By keeping the right amount of each, you’ll minimize your risk and improve your chances of weathering any coming economic downturn.

Learn more with a free gold investor kit here now.

Invest with the expectation of seeing immediate results

gold price It hit a record high this spring after reaching $2,067 an ounce in 2020. Knowing this, some investors may find it worth investing in gold now with the hope (or intent) of seeing immediate results. But the chances of gold crossing that $2,000 threshold — and staying significantly above it over the long term — aren’t high. Instead, investors should view gold investing more as a way to protect what you already have rather than a get-rich-quick strategy. While it is certainly possible that you could buy gold at one price and sell it significantly higher, this is a risk that is generally not worth taking with this particular investment choice.

Investing with the intention of having income-generating opportunities

As with the item above, investing in gold with the intention of obtaining income-generating benefits is risky and, some experts would argue, unwise. Again, gold isn’t really an income-generating asset as much as it is one Safe haven resources and guardians for other investments. When the stock market falls and inflation rises, gold stands still, so your entire portfolio doesn’t suffer. This is a significant advantage for gold investors if they already know the advantage and don’t want to use it more as a way to generate consistent income. This is why gold tends to be a better choice Young investorsCompared to those who have more time to play the market and develop their portfolio the elderly who may need something to supplement their retirement savings and Social security benefits.

Not sure if gold investing is right for you? Learn more by requesting a free information kit now.

Bottom line

There are not many investments that are risk-proof. Gold has risks that come with it like any other. There are ways to avoid these risks, however, to get the most out of precious metals. In particular, experts recommend that investors don’t put too much of their money into gold (keep it to 10% or less of your portfolio). Investors should also avoid looking at gold as something they can see immediate results from – or something they can quickly use up as an investment. If these risks are understood early on, investors will have the best chance of successfully investing in gold for years to come.