Gold is a scarce commodity that can offer multiple benefits to the right investor.

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The start of a new year is an excellent time to reevaluate your investments. It may be time to review how your investments are doing amid a volatile stock market, global volatility and inflation, which was 7.1% higher in November than a year ago. Consumer Price Index (CPI).

Many investors are turning to gold, which is seen by many as a safe haven for your money during times of inflation and volatile markets.

If you think you could benefit from investing in gold, get started by requesting a free asset protection kit.

Top 3 Reasons to Invest in Gold

If you’re interested in gold as an investment, here are three reasons to act now

Gold helps with inflation

When inflation increases, the value of your money decreases, meaning you need more money to buy the same amount of goods and services. One of the most appealing Benefits of investing in gold That metal is not tied to any form of currency.

As such, the value of gold generally has an inverse relationship with the value of the dollar. In other words, when the value of the dollar falls, gold rises. Put another way, gold prices often move in the same direction as inflation, suggesting that investing in gold can help you preserve the value of your savings over time.

Gold prices have risen an average of 15% since 1971 while inflation has exceeded 3% a year, according to a World Gold Council study.

When the CPI exceeds 5% annually, gold gains an average of 25%. Through November 2022, CPI is 7.1% higher than the rate of 12 months ago. Of course, past performance does not guarantee future results, and investors should research the market and consult their financial advisors before making investment decisions.

Potential benefits of gold in diversifying a portfolio

Diversification is an important strategy for your portfolio, and it can spread risk and reduce your vulnerability to market conditions. While there are many ways to diversify, investing in precious metals like gold is one of the most common ways to balance stocks, bonds and other investments. housing.

Gold is an attractive asset Your portfolio is diversified Because of the history of negative correlation with stocks and other assets. For example, inflation rose from 5.84% in 1970 to 13.58% in 1980, while Golden Catapult $35 per share to $850 per share.

Most recently, the S&P 500 returned a year-to-date rate of -17.88 through December 16, 2022). at the same time, Gold did significantly better Despite price declines, down -3.05% year-to-date.

Because of this negative correlation with equity, investors pursue a balanced portfolio Add some gold Holding their equity to reduce their exposure to risk.

Learn more about the benefits of investing in gold by requesting a free asset protection kit from Goldco.

The supply of gold is limited

One of the main reasons gold is valuable is because of supply and demand principles. Gold has a limited amount, making it a rare precious metal. Mining precious metals is difficult and expensive, removing gold from the earth requires finding and extracting gold.

And even when gold is successfully mined, it doesn’t always yield a lot of gold. Information from the World Gold Council reveals that global mine production supply in 2021 was 3,560 metric tons, 400 metric tons higher than total demand (excluding over-the-counter) for the metal. Limited supply combined with steady demand is one of the reasons gold remains a valuable asset.

Bottom line

If you decide to invest in gold, it is a good practice to stay up-to-date with gold market trends and track the performance of gold mining companies. Doing so can help you understand how gold prices may change in the future.

Also, understand gold’s place in a diversified portfolio. While there are periods of growth, there are also periods of decline. It is probably best to look at gold as part of a long-term gold investment strategy because it holds its value over time. Additionally, gold can act as a hedge against inflation and is an asset that can reduce your exposure to market risk.

As with any investment, weight Advantages and Disadvantages of Gold Investment Before making financial decisions. Learn more with Goldco now.

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