When people invest their money, they often focus on buying stocks or bonds. Usually when one rises the other falls, so people think they are creating diversification in their portfolio. Although there is some truth to this, there are three reasons to consider adding gold to your investment portfolio.
Gold adds stability to your investment portfolio
It wasn’t that long ago when the bottom fell out of the stock market. When many people lost money in their retirement accounts in 2008, those with investments in gold remained secure. Stocks may go down in value when interest rates rise, while bonds may drop in value as interest rates go down, but no matter which way an investment is moving, gold will serve as an anchor for your portfolio. No matter what happens in the world economy, gold creates a strong foundation of stability for a person’s investment portfolio.
Gold is a hedge against inflation
When inflation takes hold of a currency, it can erode a person’s wealth quickly. However, unlike currency, gold is tangible. During times of inflation, people have a tendency to spend their money on tangible items becomes today’s dollar is worth more than it will be worth tomorrow. Unfortunately, tangible items will depreciate over time, while gold will hold its value because it is limited in supply. When you have gold during inflation, your wealth is protected, and if the rate of inflation is high enough, you will find yourself with a great investment as other people buy gold and drive the price to high levels.
Gold is not an investment that will disappear
It is possible to buy shares of a company that goes out of business. Corporate bonds have no value when a company closes its doors as well. Municipal bonds from a city that goes bankrupt can cost an investor dearly, and there is no safe haven in real estate as was seen when the real estate bubble burst in 2008. Gold, however, has had value to people since the time of the ancient Egyptians. No one has ever lived in poverty because the only possession he had was gold. If you invest in gold, you will still have an investment with value many years from now.
It is clear that an investor should have a certain amount of gold in their basket of investments, and buying gold is now easier than ever before. In fact, you can order today from an online company. One example is the Houston Numismatic Exchange.
