Gold investing interest is high. Here's how you could benefit, too.
Gold has been a hot commodity in 2023. The strong demand for the precious metal is likely to continue throughout the rest of 2023 and into 2024. With the price of gold being beholden to the law of supply and demand, that means now is a great time to dive into the commodity.
But what exactly is driving the increased demand for gold? Perhaps more importantly, is it worth investing in for you, too?
Learn more about your gold investing options here today.
Why you should buy gold now
There are multiple reasons why gold makes a compelling investment vehicle now. Here are two major ones to know.
- For help with inflation: Inflation has cooled off but the Fed's overall progress in the battle to tame higher costs has slowed in recent months. Inflation remained unchanged in September at the same 3.7% rate it was in August. Gold has historically been known for the help it can provide during inflationary periods by keeping it's value (or even seeing an increase) when the purchasing power of the dollar has fallen. This is arguably the biggest reasons why investors have turned to the precious metal this year.
- For portfolio diversification: With the performance of stocks and bonds uneven and difficult to predict long-term, many have turned to gold to help diversify their portfolio. A portion of your portfolio invested in gold can help keep other, more volatile assets afloat during times such as now.
Bring stability to your portfolio with gold today.
What experts say about adding gold to your portfolio
"Believe it or not, there are reasons other than seeing pop-up ads and TikTok videos about gold investing to invest in the commodity," says JB Beckett, founder of Beckett Financial Group in West Columbia, South Carolina.
Beckett continued, explaining that "during times of high inflation, gold has historically been seen as an inflation hedge. During times of geopolitical or economic uncertainty, investors have turned to gold as a safer place to invest."
He also pointed to the fact that "gold is liquid." So, if "you have some gold or silver coins at home," Beckett says, "they can be converted to cash if and when you need them."
What is the time horizon for gold investments?
When you start to invest in gold, it's important that you look at the investment with a longer-term time horizon than other investment vehicles. Beckett says gold is "a long-term asset that should be treated as a longer-term investment than most other assets. Do not expect to see consistent predictable returns when investing in gold. That has not been the nature of gold prices over the past 30 years."
Because of the long-term nature of gold investments, this is a perfect asset to consider for your retirement portfolio. Moreover, if you add it to your retirement investments you'll enjoy tax advantages. As is the case with stock and bond retirement investments, gold retirement investments are made on a pre-tax basis in traditional accounts. If you opt for a Roth gold IRA, your gold's value will grow on a tax-free basis.
Add gold to your retirement portfolio now.
The bottom line
The bottom line is that there are several reasons you should consider adding gold to your portfolio right now, with it's ability to help with inflation and diversify your portfolio at the top of the list. Adding the precious metal to your portfolio could protect you from continued inflation and potential market declines while improving your risk-adjusted returns.
