The news last week that popular warehouse retailerwas greeted warmly by its members. So warmly, in fact, that the . Considering that the 1-ounce gold bars were selling for just under $2,000, that product excitement may be difficult for many to understand. But for many seasoned investors, it makes sense.
for a variety of reasons, which could benefit and backgrounds. If you're one of those considering the gold investing craze now (it hit in September) then it first helps to understand the benefits of investing in the shiny metal.
What to know about gold investing now
Whether you want to, or simply feel comfortable using a , it's important to understand the benefits a gold investment can provide you. Here are three of the top now:
To hedge against inflation
Gold has long been considered a reliable. And in case anyone hasn't noticed, inflation is still humming along. After almost a year of cooling, it ticked up again in and again in . Interest rates meant to combat it, meanwhile, are at a .
Against this backdrop, it's understandable why many want the hedge gold can provide. Gold tends to do well during uneven economic times and can even experience a tick-up in value. With limited ways to protect your funds now, gold can often be a smart alternative to pursue.
To diversify your portfolio
A portfolio filled with stocks and bonds can experience wild swings in both directions. While that volatility can produce substantial returns quickly, it can also wipe out earnings overnight.
Because of this, it's often helpful to have a stabilizing element in your portfolio.and offset losses felt elsewhere. While gold may not produce income in the same amount or same timeframe as other investments, you're unlikely to lose as much value as quickly either. Just make sure to (most experts recommend limiting the gold portion of your portfolio to 10% or less).
To add some liquidity to your investments
Stocks and bonds can be great, but they don't come with the same flexibility that gold does. If you own, for example, you can generally sell them for a respectable price quickly and efficiently, making gold one of the better to pursue. It's easy to buy, easy to sell and accepted around the globe. So, if you're looking for an investment that you can part with easily (at or above) your investment price, gold is often a smart choice.
The bottom line
Once familiar with the benefits of gold investing, it's not surprising that the gold bars sold by Costco quickly ran out. Chances are, those purchasers were looking for the same benefits — a hedge against inflation, a portfolio diversifier and a liquid asset — that many investors have already used to their advantage. The only difference now is that there's one more avenue to pursue the shiny metal.
for more features.