No matter where you are in life, it’s never too late — or too early — to start thinking seriously about investing. The single best time to think about the future is yesterday, and it’s generally advisable for people to begin investing immediately after entering the workforce. Given time, you will likely start receiving investment advice from friends, family, or financial advisors regarding where to put your money and how to diversify your portfolio. Whether you’re considering buying stocks, cryptocurrency, or commercial property, there are innumerable investment options available to meet your overarching financial objectives.
One of the more widely discussed investment options today is precious metals, and for centuries, gold has remained among the most valuable. But to what extent is gold a viable vehicle to put your money in when compared to traditional investment options such as mutual funds or stocks?
According to a 2020 Gallup poll, some 16% of Americans regard gold as one of the best long-term investments available. This has many people asking, “Should I invest in gold?”
And the short answer to this question is yes, without a doubt. Regardless of your financial goals, liquid assets like gold are an excellent addition to any portfolio.
Few investments can match the longevity, security, and flexibility attached to this increasingly scarce metal. In short, gold is a smart, safe, and profitable method to grow your money. With the volatility attached to the economy, swinging inflation, and performance dips in other holdings, savvy investors are buying gold in a variety of formats.
The Value and Upside of Gold
Few other precious metals can compare to the resilient value of gold. In just 20 years, the price of gold has increased more than sixfold from a mere $264 an ounce in January 2000 to more than $1,800 in December 2021. This value continually outperforms other precious metals such as silver, which is currently priced at $22.97 per ounce, and even platinum, which goes for $942 per ounce.
As a finite resource, gold manages to retain its value due in large part to the fact that it’s impossible to create more of this rare natural resource. Because gold is so scarce, the metal is likely to only increase in price in the years and decades to come, making it capable of weathering virtually any economic downturn, financial collapse, or unforeseen event in the global marketplace.
Due to its resilience and consistent positive valuation, many financial advisors recommend devoting at least a small portion of an investment portfolio to assets like gold. Next to real estate, gold remains among the leading long-term investments Americans choose to include in their portfolios. One of the most attractive aspects of gold is its flexibility and versatility because it may be used in several different capacities to build wealth. For instance, some investors prefer to purchase gold coins and physical bullion, whereas others find that an authorized gold IRA is the better option for their goals and preferences.
Potentially the biggest advantage to holding gold is its consistent resistance to inflation. Paper currencies like the U.S. dollar are poorly insulated from market trends, and during times of high inflation, like today, holding cash can eat away at your valued wealth over time. Regardless of economic factors, political upheaval, or financial crises, gold will remain one of Earth’s most prized natural resources. For these reasons, among others, gold will remain a safe and lucrative investment to include in any healthy, diversified portfolio.
How Investing in Gold Can Secure Your Future
Unlike investments such as commercial property or luxury vehicles, gold is highly liquid, meaning it’s easy to exchange it for cash if the need arises. This liquidity ensures that purchasing gold presents a minimal risk to the investor and instead provides a store of value to hedge against more volatile investments. Devoting just a tiny portion of your portfolio to gold can create an insulating barrier against currency devaluation, inflation, and the many economic uncertainties facing the world today.
With gold eyeing the $2,000-per-ounce mark, investors should consider buying gold sooner than later as its price is projected to continue trending upwards in the coming decades. Some forecasts suggest gold’s price may increase substantially in just a few years, possibly reaching $3,200 by 2025. With the limited downside and almost unrestricted growth potential, many investors are scrambling to acquire this precious commodity before the barrier to entry becomes too great for the average American.
Gold has long positioned itself as the epitome of wealth, luxury, and success. The recent momentum has only further bolstered its appeal to investors, making this precious metal one of the best assets money can buy today. Here are five ways gold can help you build a brighter future well into retirement, giving you the monetary flexibility you need to meet your unique financial objectives during your golden years.
1. Gold IRA
Similar to a traditional individual retirement account, a gold IRA allows an investor to acquire holdings of actual gold instead of more conventional assets such as cash or stocks. Although opening a gold IRA gives you ownership of gold bullion, there are certain caveats. For instance, only certain forms of gold qualify for inclusion in a gold IRA, and the purchased bullion must be securely stored by an approved custodian. This custodian will hold your gold during the lifetime of your IRA until you decide to close your account or sell your gold on the open market.
Due to broker and storage fees, the costs of maintaining a gold IRA are usually higher than the maintenance fees for an IRA backed by regular assets. On the other hand, owning a portion of physical bullion through a gold IRA can provide your portfolio with a strong hedge against inflationary economic conditions, preserving your wealth in the process. In addition, because your gold remains safely stored in a secure facility, you’ll never have to worry about theft or asset loss.
Gold’s increasing valuation makes this precious metal a strong investment for augmenting your long-term retirement plans. With a gold IRA, you can benefit financially from gains in the bullion market without having to go through the trouble of handling the metal yourself. If the past 20 years were any indication, gold prices will likely continue to climb well into the future, making this investment option an excellent choice for those who are risk-averse.
2. Gold Coins
Another way to secure your financial future with gold is to purchase gold coins from a certified dealer. Unlike larger gold bars, coins rarely exceed 1 ounce in weight and are typically much easier to liquidate than larger denominations of bullion. Coins minted by sovereign nations are among the most valuable because it’s easier to trace their providence and trade them in for cash. Some of the most sought-after coins include the Canadian Gold Maple Leaf, the British Gold Britannia, and the Austrian Gold Philharmonic.
Many investors choose to purchase gold coins simply because they prefer to hold the asset physically instead of monitoring a gold IRA or gold stock portfolio on paper or computer. This approach to owning gold avoids the fees of custodial storage and can offer a greater sense of security for the more pragmatic investor.
The most substantial advantage to holding gold coins is that they can be sold or traded at a moment’s notice. When you make a purchase, you are paying for the premium and shipping of the coin upfront, ensuring there are no additional costs involved in the process. Meanwhile, you’ll have a precious heirloom to pass on to your family that can help you preserve wealth for generations to come.
Gold coins are an ideal long-term investment due to their consistent desirability on the open market. If or when you decide to sell your coins, you’ll find an abundance of interested buyers thanks to their affordability and value as collectibles.
3. Gold Bars
To purchase gold in its purest form in denominations of 1 ounce or more, gold bars are an excellent option. The main advantage of buying gold bars is that they often come with a lower premium. For example, each gold coin purchase comes with a premium fee attached, which can make buying several individual coins an expensive endeavor. However, many gold providers will offer discounts on the premium over the spot price when customers buy in bulk. This means that when you buy gold bars weighing 5 ounces or more, it’s possible to save a substantial sum upfront.
One of the major draws for investors in gold bars is the ability to physically hold them like with coins or jewelry. Whereas some prefer to store their gold bars in a personal safe or bank security box, others may opt to allow a third party to handle storage.
Gold bars are ideal for those who wish to utilize a greater single source of value instead of buying multiple coins or pieces of jewelry. Gold bars are relatively easy to sell, but bear in mind that, because higher denominations are less affordable, it may be challenging to liquidate them at a moment’s notice.
4. Gold Jewelry
Gold jewelry has served as a status symbol for the most wealthy and powerful people in society for many millennia. Elegant and functional, gold jewelry is another route that can help you secure a better financial future. Gold jewelry retains its value well over time, but there are several things to consider from an investor’s point of view. For one, gold jewelry comes in many weights, ranging from 14 to 24 karats, and this purity can have a dramatic impact on its market value. Additionally, with something as specific as a piece of gold jewelry, the number of potential buyers dips, lowering potential values. You’ll need to acquire some knowledge of the jewelry trade before making a purchase from certain retailers, such as some online stores, pawnshops, or private sellers.
You’ll also want to carefully evaluate the price of the jewelry in contrast to its actual value in gold as many pieces of jewelry will cost more than the actual spot price of the gold. This means that it may take some time to realize a considerable return on your investment. With that said, there is a market for high-quality gold jewelry that can make it useful in augmenting your other retirement investments.
5. Gold Mining Stocks
If you’re more comfortable investing in regular assets, gold mining stocks may be the right option for you. Gold mining stocks can provide you with exposure to the booming gold market without all the trouble of storing the physical metal and the associated fees. Gold mining stocks operate in the same way as other equities, and several gold mining companies even pay modest dividends to their shareholders.
One of the attractive characteristics of gold mining stocks is their affordability. For instance, a single share of Eldorado Gold Corporation would cost you $9.45 as of December 2021. The VanEck Gold Miners ETF is also reasonably priced at only $31.30 per share.
A big benefit to gold mining stocks is that they are eligible for inclusion in a traditional IRA portfolio because you’re not investing in the physical metal. At the same time, you can potentially enjoy leveraged gains if the price of gold continues to take off in the future.
Invest in Gold With Wall Street Metals
Are you thinking about investing in gold to diversify your retirement portfolio? Our team at Wall Street Metals can help you reach your financial goals. We offer a wide range of quality, certified precious metals, including gold, silver, platinum, and palladium, all of which are readily available in a variety of denominations.
Browse our wide selection of beautiful sovereign gold coins and bars, or consider speaking with us about opening a gold IRA today.