Between, volatile markets and ongoing economic uncertainty, you might be looking for some stability in your finances.
Many smart investors know that one of the best ways to safeguard your investments is by. This means rather than investing only in certain stocks or bonds, it can benefit you to invest in things like index funds, real estate and even commodities like gold.
Diversification is one of the best ways you can protect yourself against market fluctuations and volatility. And becausehas a reputation as a safe investment and even an , it could benefit you to think about making the investment yourself.
If you're considering adding gold to your portfolio then start by learning more with a free information kit.
Why gold is good for diversifying your portfolio
Historically, some investors havebecause it offers a sense of security in volatile markets.
But in fact, the asset better serves investors for the purpose of diversification, Loreen Gilbert, CEO of WealthWise Financial Services previously told.
Over the past 10 years, gold prices have increased, but not as dramatically as other common investment indexes, like the S&P 500. Since 2013, gold spot prices have increased from around $1,300 to close to $2,000 per ounce, according to data from the World Gold Council. Meanwhile, S&P 500 data shows that the index traded around $1,500 in 2013 but today is priced near $4,000.
However, not every year ends with success in the stock market. Diversifying with different investment types can help keep your money safe through more volatile times — like we've seen over the past year. For example, between spring 2022 and 2023, the S&P generated a negative annualized return of around -7%, while gold increased by a marginal 0.5%.
That may seem like only a small uptick, but it may be useful for keeping your broader portfolio in shape when other investments are underperforming.
As a long-term investor, it can pay to protect yourself from whatever the economic future may bring. Diversification is a great way to do so whether you choose to diversify with gold or other types of assets.
Options for diversifying with gold
Here are just a few ways you can, in whatever amount makes sense for your financial goals.
- Gold IRAs: Like standard traditional or Roth IRAs, are a way to save for retirement and come with contribution and distribution limits for investors.
- Gold ETFs: If you're already familiar with investing in stock market ETFs, this type of gold investment may be familiar. A gold ETF allows you to invest in gold without physically owning any of the metal.
- Gold bullion: If you do want to own a bit of physical gold for yourself, you can from trusted vendors.
The bottom line
With a well-diversified portfolio, you may be able to reduce your investment risk and keep long-term gains possible, despite short-term market changes.
What's more, diversification can help you weather periods of uncertainty and volatility, especially if you can maintain some stability in some assets during periods where others fluctuate more.
If you think gold could be a smart way to diversify your portfolio, request a free information kit to learn more today.
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