Between the coronavirus pandemic, tensions among the United States and China, and turbulent negotiations about another economic aid package, the health of stocks and bonds is currently in flux. Whether you’re an investor who enjoys taking risks with your money or you prefer to play it safe, this is a particularly stressful time for many people who are looking to grow their money and keep their financial goals on track. Cue gold: a popular investment that is traded in commodity markets and is a great investment for diversifying your portfolio and growing your money—especially during a pandemic! Our financial planning specialists here at Creative Financial Planning have weighed in on the magic of 24 karat investments, so read on to learn their reasons for why part of your financial portfolio could benefit from including gold.
Four Advantages That Give This Metal the Golden Touch
Over the years, gold’s popularity has come and gone, but its popularity is back again! In fact, in the first half of 2020, gold Exchange Traded Funds (ETFs) saw $175 billion inflows, and as of this month, its value has increased more than 36% year to date. Here’s why the value of gold is holding strong:
It is viewed throughout the world as a store of value
It provides investors with a liquidity edge
It has the ability to accrue value
It offers stability during a disaster
Because we’re currently living through the COVID-19 pandemic, this last point is of the utmost importance. Although the advantages of gold are clear, knowing how much of your portfolio should be dedicated to this metal can be difficult. It’s best to utilize financial planning specialists who provide rigorous portfolio monitoring services to their clients—this will ensure that you’re investing the right amount of money in gold at the right time.
So why should you consider only dedicating part of your financial portfolio to gold? Well, like any other type of investment, gold’s advantages also come with disadvantages, which include, but are not limited to, the following:
It doesn’t pay a dividend like a stock or bond
Purchasing gold ETFs may incur a brokerage fee
In the short-term, gold can exhibit periods of high volatility
Physical gold investments often come with additional fees, such as insuring and storing it
A Diverse Portfolio is Good as Gold
In order to accumulate, grow, and protect your wealth, our financial planning specialists recommend a diversification suitable to your needs. While investing your money in stocks, bonds, real estate, and other types of investments are all important, our team does often suggest also incorporating gold investments into portfolios. Remember: the financial world is rapidly changing every day, which is why you want financial advisors who offer long-term guidance and support, as well as flexible plan adjustments. By having these benefits, you will be confident that your financial plan will always reflect your ever-changing goals.
Now that you know why part of your financial portfolio could benefit from being weighted in gold, our financial planning specialists are here to help you strike it right! With 35 years in the financial planning industry, we have the experience and knowledge needed to help grow your wealth effectively. Contact us today to schedule a complimentary consultation with our team.
Diversification does not assure a profit or protect against loss in declining markets, and diversification cannot guarantee that any objective or goal will be achieved.
Investments involve risk, including loss of principal amount invested. The precious metals, rare coin, and rare currency markets are speculative, unregulated, and volatile, and prices for these items may rise or fall over time. These investments may not be suitable for all investors, and there is no guarantee that any investment will be able to sell for a profit in the future. The commodities industries can be significantly affected by commodity prices, world events, import controls, worldwide competition, government regulations, and economic conditions. Past performance is no guarantee of future results.