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Sunday, April 21, 2024

3 big ways gold can boost your portfolio now

Investors should always be researching their options, no matter what the overall economic environment is. But with nagging inflation still in the background and yet another interest rate hike on the horizon for later this year, now is an opportune time to take a closer look at your portfolio. While stocks and bonds can produce income, they can also lose it quickly due to their overall volatility. In times like these, it can be beneficial to invest in some alternative, lesser-known assets as well.

One such asset that many have turned to recently is gold. Investing in the precious, yellow metal actually hit an 11-year high earlier this year. And that’s due to a variety of reasons, some of which may be attractive to investors now.

If you’re considering the benefits a gold investment can provide then start exploring your options here now.

3 big ways gold can boost your portfolio now

Here are three ways investors can potentially benefit from an investment in gold now:

By getting some help with inflation

Gold investing has multiple advantages but arguably none as important as the hedge it can provide against inflation. Gold, historically (though not always), can help with inflation by maintaining its price or even increasing it at the same time the values of other assets falter. This doesn’t mean that you shouldn’t be invested in those other assets, too. But understand that without gold your portfolio will be a lot less diverse – and a lot more likely to be hurt in poor economic periods – than it would be if you had invested some in the metal. That said, a gold investment can only do so much. An investment in the metal should generally be limited to 10% or less of your overall portfolio.

Learn more about the right way to invest in gold here now.

By diversifying your portfolio

Stocks and bonds likely already make up the majority (if not all) of your portfolio. But those assets can be shaky and should generally be diversified a bit. Gold can help do just that.

“Commodities, including gold, act as good diversification tools,” Gregory Young, CFP, founder of Ahead Full Wealth Management, previously explained to CBS News. While equities are generally better to be more involved in than gold, the latter can still provide some valuable diversification advantages. “Of the many precious metals, I would prefer gold because it has had the best growth and behaved the least erratically,” Young said.

By providing some flexibility

Gold is considered a liquid asset in the sense that it’s generally easy to buy, sell and store as needed. For many investors, this can be a big boost, especially when their overall portfolio is tied down with more traditional assets that may be time-consuming to extrapolate themselves from. So, if you’re looking to turn an asset into cash quickly,then an investment in gold could be exactly what you need.

The bottom line

While not the income-producing asset that others are, gold can still be a beneficial investment for many. By getting involved now you can hedge against the ongoing negative affect of inflation and help diversify your overall portfolio. A gold investment in the right type can also help by providing some extra flexibility as it’s typically easy to store, sell and buy.

Have more questions? Learn more about investing in gold here today!

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