Numerous investors are looking for safe assets with all of the economic turmoil taking place today. Investing in the stock market is a proven way to build wealth. However, some people worry about various financial risks and the impact those risks could have on investment returns. Older investors generally look for safer asset classes to invest in.
Gold is an excellent place to invest for people who are worried about safety. Gold generally increases in value during an economic recession.
One of the worst things that can happen during an economic downturn is inflation. Inflation is a gradual increase in the price of various goods and services. For people who are close to retirement, inflation can cause substantial financial problems. Most retirees live on a small income. When food and utilities cost more, retirees must look for additional options to produce income.
Gold is an attractive investment option because the asset generally stays the same value over time.
Hedge Against Collapse
Another reason to invest in gold is that it is a proven hedge against economic collapse. One of the only asset classes that improved in value during the recession of 2008 was gold. Investors on the verge of retirement should consider adding substantial amounts of gold to their investment portfolios. Although gold does not produce as high of a return as stocks, it is less volatile over time.
One of the most significant economic stories of 2018 is rising interest rates. As the economy improves, the Federal Reserve is expected to increase interest rates multiple times. As rates rise, numerous changes take place in the marketplace. The cost of borrowing money rises drastically. Investors also have more options to earn a reasonable rate of return. Certificates of deposit and bonds become more valuable as interest rates increase. Gold also becomes more valuable in an economy with higher interest rates.
How to Buy Gold
There are multiple ways for investors to purchase gold. Some people prefer to buy an index fund that follows the price of gold. Others would rather buy physical gold to keep in their homes.
Although gold should not be a person’s only investment, it should be a part of everyone’s portfolio. Gold will help an investor keep a reasonable rate of return if the economy crashes. It can also protect the value of a portfolio during times of inflation.