Inflation ticked up twice over the summer, despite multiple months of cooling. And the benchmark interest rate is sitting at a 22-year high. Then, this week the Federal Reserve announced a pause in interest rate hikes — their second such break since June. Amid this backdrop, many investors may be reviewing where they store their money.
Gold has taken on new importance this yeardue to its hedging capabilities against inflation and its ability to diversify investors’ portfolios. But with a temporary pause in interest rate hikes — and likely cuts to the benchmark rate in 2024 — gold investors may want to make some smart moves this fall before their options become more limited.
Smart gold investing moves to make this fall
Here are three smart gold investing moves to make this fall.
Yes, you read that right. If you’re not invested in a portion of gold, then the first thing you should do is get started. There are multiple benefits to investing in gold, and multiple ways to do so, ranging from gold IRAs to gold bars and coins to gold stocks and futures. But you won’t be able to diversify your investments — and protect against wider inflation-caused issues — if your money is completely locked away in stocks, bonds and real estate. So get started with a little gold today and start reaping the rewards it can offer.
Invest in the right amount
Gold is different than many other investments, so you’ll want to be smart about how much you invest in the precious metal. Most experts would advise limiting your gold investment to just 10% of your portfolio, but that figure could be lower depending on your age and other factors.
But the amount you invest is key, particularly now when the economic forecast is unclear. Be smart but be cautious. Stay within that limit.
Understand the pros and cons
Like any investment, there are pros and cons to gold investing. Make sure you understand these before jumping in. Yes, gold can help protect your money against inflation and, yes, it can diversify your portfolio. But it won’t produce income, at least not in a substantive amount short-term.
And, it may be hard to easily sell unless you have a liquid gold investment. Do your research and know the pros and cons of each gold investing type in order to maximize your benefits this fall.
The bottom line
With inflation still in the background and interest rate hikes paused, at least temporarily, this fall could be an opportune time for investors to get started in gold. But they should approach the shiny metal cautiously by getting started with a small investment, and with a clear-eyed approach, knowing both the pros and cons and what gold is capable of doing now (and what it’s not). By taking that approach, investors can better improve their chances of adding a successful asset to their portfolio this season.