As if a rise inover the summer and decades-high weren't problematic enough for millions of Americans, there is now strong . An October 1 deadline to continue to fund the government is looming, but there's no deal yet agreed to. While a shutdown won't touch programs that already have permanent funding, it's likely to cause some concerns on the market and will leave many investors even more worried than they already have been.
In times like these, many investors turn to. While not as well known as many other investments, the shiny, precious metal has , particularly during volatile and unpredictable economic conditions. But should you invest in gold now — or are you better off reconsidering some other investments instead?
Should you invest in gold now?
Many people invest in gold during times of economic crisis or uncertainty. And, it's easy to understand why. Here are three reasons why you may want to start investing in gold now.
A government shutdown — combined with elevated interest rates and inflation — could be bad news for the stock market. But, if you're invested in gold, it may not be completely bad.
Gold is known for its ability toand protect against the erosion of the U.S. dollar. So if the government shuts down and your portfolio of stocks and bonds looks shaky, gold is likely to stay firm and maintain its , thus protecting your investments from a total shock.
Help with inflation
Gold is arguably best known for its ability to. And after it rose twice over the summer — and another time in August — investors would be wise to add some protection to their portfolio in September. Just make sure to (most experts would advise keeping your gold portion to 10% or less of your overall portfolio). Otherwise, you could risk losing out on better (albeit more volatile) income-earning opportunities.
To maintain liquidity
Stocks and bonds will make you money, and most experts would advise keeping the majority of your money invested in them. But they're not easily, and if you need access to cash fast, it will be difficult to achieve with stocks and bonds. That same concern isn't present with many gold investments, particularly the physical types like .
Granted, if you need to sell your physical gold quickly, you may not earn the very top dollar. But having the flexibility to do so, particularly in today's inflationary environment, is a clear advantage when stacked up against other traditional investment types.
The bottom line
Inflation, higher interest rates and now a potential government shutdown all combine for a poor economic forecast. But you don't necessarily have to suffer through it. By investing some money into gold now, you can successfully diversify your portfolio and hedge against the worst of inflation. And, if you invest in physical gold, you'll maintain some liquidity and ease that you simply wouldn't have enjoyed with many other investment types.
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