Following months of growing, combined with rising interest rates, inflation and other economic uncertainty, it's no surprise many investors are turning to gold. The precious metal has been a for centuries, and this year has already seen an increase in value.
But if you're thinking about investing in gold, it can help to consider itsfor your portfolio. Whether you decide to invest in physical gold bullion, gold ETF shares or a , gold is a secure investment type that you can benefit from over time.
Like any asset, there are periods when your gold investment can boost your portfolio more than others. Below, we'll go over a few times when you may get the most from investing in gold. Explore your options for gold investing here with a free information kit.
4 times gold can help your portfolio most
Market ebbs and flows mean that yourcan help you out more at different points throughout your investment timeline than others. Here are some times it can help the most:
When the U.S. dollar value is down
Gold, historically, is viewed as a good. When the value of the U.S. dollar goes down as inflation dampens its purchasing power, gold's value often rises.
A prime example is the inflation during the 1970s. Over the decade, the inflation rate averaged nearly 7%. Meanwhile, gold prices increased from around $35 per ounce at the start of the decade to over $600 by early 1980 according to data from the World Gold Council — far outpacing inflation over that time. Even today, over the past year. Though these steep climbs , having a portion of your portfolio in gold during inflationary periods can pay off over time.
Learn more about how you can benefit from a gold investment today with a free investors kit.
During a recession
When the economy is weak, gold tends to increase in value; after all, it's viewed as a. When investors want to , they often buy into gold, increasing its demand and price.
"A rise in the price of gold may be a signal that the economy is struggling," reads a report from the Bureau of Labor Statistics published following the Great Recession. "As a result, in times of either a crisis or inflation, many investors turn to gold to protect their principal. By contrast, in times of economic stability, investors are more likely to turn to more speculative investments, such as stocks, bonds and real estate. During these times, the price for gold often declines."
Investing in goldcan help your portfolio by keeping your overall investments relatively stable. Even if you lose money elsewhere, you may be able to weather the overall economic downturn with a portion allocated to gold.
When your other investments are volatile
Gold also makes a goodagainst downturn in other markets. Though it may not directly rise when the stock market or real estate market is down, it also doesn't tend to move down alongside them, either.
Gold often moves independently of other markets, which is why it's seen as a. Take, for example, the 2022 market. While the S&P 500 , gold's price remained stable over the year, ending at a similar price point as it started.
You may not always see the large gains other markets take on during upswings, but using gold as a diversifier can help you keep some stability through changing economic environments.
When you have a long investment timeline
Thanks to all the factors above, gold may be ideal when you have aahead of you.
Over the next few decades, the economy could see any number of periods of inflation, recession and uncertainty — so you can benefit from gold each time. And with a long period of time to invest, you can afford to take on a bit more risk, anyway.
Experts generally recommend investing only around. Traditional stock and bond investing, alongside other assets, are still important sources of growth. A small allocation to a stable asset like gold paired with other assets that can help you build wealth over the long term can be a good combination for a well-diversified portfolio.
Start learning more about how to add gold to your portfolio with a free investment guide today.
The bottom line
If you're considering, understanding just how the asset's value tends to change over time and its benefits as a diversifier can help you . Periods of recession, inflation and overall market volatility are when gold may make the biggest difference. Plus, if you have a long investment timeline, you can expect to experience a number of these periods in the decades ahead.
If you're still unsure, consider speaking with a financial advisor about whether gold is right for you and how much to invest. And to learn more about how to invest in gold, start with a free information kit today.
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