Why you should not time your gold investment

2023 was a great year gold price. Not only has the value of gold continued to rise, it has crossed the $2,000 threshold several times, surpassing its all-time high in April and again in May.

Given the significant growth — coupled with rising consumer prices, Worries about recession and uncertainty in other areas of the financial system – More investors Gold may be considered today. Although now there can definitely be one Good time to investIt is important to remember which gold investment is best.

Instead of planning a short-term investment where you buy low, then sell high, investing in gold can have a much bigger impact when you use it as your store of value. Long term investment plan. Read on to learn more about why market timing can be a mistake and how you can get more value with other strategies.

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Why You Shouldn’t Time A Gold Investment

Long-term investors will tell you that trying to time the performance of any market is never a great idea. that Especially true for goldwhich can have large price swings in short periods of time, although it remains relatively stable over time.

“While gold prices can rise dramatically during periods of volatility, I don’t recommend trying to do so during those price movements,” said Alex Rezzo, CFP, founder of Andante Financial. “First, it is difficult to time your entry and exit from your gold positions profitably, and even professional commodity traders suffer significant losses trying to do so.”

What’s more, its overall price stability doesn’t make it ideal for growth, anyway. If you invest in gold, you’re probably looking for ways to maintain your portfolio’s value during a downturn. Traditional investments like stocks and bonds are much better suited to growing wealth.

“A short-term focus on when to enter and exit gold positions can distract investors from the more sustainable sources of long-term growth we see in diversified exposure to resilient businesses through stocks,” Rezzo said.

So if you decide to invest in gold, use it for its unique properties — as a long-term store of value and Portfolio diversifier – Not as a quick way to increase your investment value.

Learn more about how to use gold in your portfolio with a free investor kit today.

Smart way to invest in gold instead

In general, gold is best used for stability and diversification. You can use it Hedge against periods of inflation And keep your portfolio stable during market downturns — especially with longer investment timelines.

For example, “10 ounces of gold bought 23 years ago in 2000 would have cost about $2,800,” says Mel Mattison, CFP, financial services professional and consultant. “Now, a child born then might have about $20,000, probably enough for a down payment on a starter home. Obviously gold has outpaced inflation over that period. And that’s the thing, long-term gold will never let you down, at least not for the last two thousand years. Didn’t.”

Allocation is smart if you invest in gold Only 5%-10%, to allow you to grow the rest of your portfolio with more traditional, growth-focused investments over time. This allocation can help you maximum safe haven gold side In any economy.

Is gold a good investment for you? Talk to an expert who can help guide you through your options today.

Bottom line

Gold can make a great addition to your investment portfolio — with the right approach. Instead of timing the market, you’re more likely to get Best value from your gold investment With a long-term investment mindset. Gold can help you diversify alongside traditional assets like stocks Market slump and help you Maintain standards During periods of inflation or economic uncertainty.

Find out how you can start investing in gold today with a free investment guide!