Why you should invest in gold in 2023
A new year is a time for reevaluation for many Americans. If you're one of them, you may be taking a look at your finances — specifically, what you're investing in as we head into a potential recession.
For some, gold may be a smart choice as an investment this year — and for more reasons than one. If you're one of the many Americans considering this unique investment opportunity then start by requesting a free information kit to learn more.
Why should you invest in gold in 2023?
If you're considering investing in gold, here are some of the benefits it may come with.
It's a good hedge against inflation
Gold and other precious metals have long been considered a smart way to fight inflation. That's because it tends to hold its value — and preserve your purchasing power — over the long haul, despite fluctuations in the dollar.
As Frank Trotter, president at Battle Bank, explains, "Looking forward to 2023, as inflation continues to run high, this might be an excellent time to increase allocations to gold. Over time, analysts have shown that gold has been a good hedge against inflation."
The Personal Consumer Expenditures (PCE) index measures the prices people in the U.S. pay for goods and services. In 2022 the index ranged from 6% to 7% — well above historical norms for the country. It was also much higher than the 2% rate the Federal Reserve has been targeting. According to experts, the economy may not hit that mark until 2025 — possibly even later, making gold an even more interesting investment to consider in the new year.
"From what we're seeing from recent economic data, combined with the position of the Fed, it's unlikely that the economic pain will get better soon. In fact, it's likely to get worse," says Richard Gardner, CEO of financial technology firm Modulus Global.
"The historic government spending in the form of stimulus during the shutdowns, combined with a land war in Eastern Europe, plus lingering supply chain issues surrounding a resurgent Covid-19, makes it likely that the economy won't rebound in the near-term. All of that bodes well for gold, given that it has historically overperformed during times of inflation."
You can explore your gold investment options online now or via the table below.
It can diversify your portfolio
When an economy slumps into a recession — something Goldman Sachs says has a 35% chance of happening in 2023 — the stock market does, too. Real estate investments can also lose value during a recession.
During these times, gold can be a good way to ensure a diverse portfolio, reduce your exposure to these riskier assets, and minimize the impact of any losses.
"If investors are looking ahead at a possible recession, and perhaps stagflation, reallocating into gold can be an appropriate choice as they reduce exposure to stocks and bonds," Trotter says.
It's more liquid
In a recession, liquidity — or being able to offload assets for cash quickly — is key. Then, if you fall on hard economic times, you can cash in on those assets and still stay afloat on bills and other necessities.
Stocks, bonds, real estate, collectibles and other tangible assets are illiquid investments. They're hard to turn into usable funds, particularly when demand for those items is down (who wants to buy rare artwork when you can't pay the bills?)
Gold, on the other hand, is highly liquid and can be exchanged very quickly for cash, making it a smart investment during down periods. As Gardner puts it, "Gold is a useful addition to diversify a portfolio given its price stability, as well as its high liquidity."
Good for some, not for others
To be clear: Gold is a good investment for some, but it's not the right move for everyone. If maximizing your investments' growth is a priority, for example, then gold's probably not for you. Gold is typically considered a low-risk, safe haven investment — not one that offers high returns.
If you're not sure if gold is the right move for your finances — or you need help making a gold purchase, talk to an investment advisor or financial planner. They can help you make the right choice for your goals and appetite for risk.
Goldco also offers a free information kit for 2023 that has additional context that you may find helpful.
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