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It might seem that retirement is a long way off, but when you hit your 50s, it won’t seem very far away!
There are always risks connected with investments, especially when they are popular. Many people never buy anything but stocks and bonds, and this isn’t a great idea. Having 100 ETFs isn’t real diversification, no matter how smart you are about what funds you buy.
In order to insulate your portfolio from economic shocks, you need to have assets that exist outside of the financial system.
While many people like real estate and fine art, these assets aren’t liquid, and don’t have a market price. Precious metals, like gold, on the other hand, is a non-financial asset that can be held in an IRA, and sold easily if you need the money.
Let’s look at some of the major benefits of saving some of your money in a gold IRA.
#Benefit 1: Low risk
On the global economic stage, gold is an asset that will always have value. The value of gold predates human history, as people were using gold as a valuable metal when we started writing. While the price of gold will fluctuate in fiat currency terms, over the long run, gold always has value.
Gold has a low correlation with the stock market, so if there is a major crash, your gold investment will still have value, even if half of the companies in your stock portfolio go out of business.
In addition, fiat currencies come and go. While bonds have been a stable investment for decades in places like the US and UK, this isn’t always the case. Sometimes currencies fall apart, and the bonds of the country that issue the currency are worthless.
A financial planner in New York advises: “Gold IRAs can stabilize your retirement savings. A financial planner can help integrate this into your broader investment strategy for optimal benefit.”
Owning gold won’t make you rich, as the yellow metal does not pay interest, and won’t grow. But, when it comes to making sure you have something of value for your old age, gold is a great choice.
#Benefit 2: Inflation proof
The gold price may not track the inflation rate directly on a quarterly basis, over time, gold wins over inflation every time. There is no instance in human history when fiat currency held its value forever, and eventually every fiat currency will become worthless.
Gold isn’t produced by central banks, and a very small amount comes into the market every year. So while there is technically a small amount of new gold entering the market, there is far, far more fiat currency produced yearly.
If you take the time to look into what actually happens when inflation heats up, you will see that gold is likely the best financial asset a person can have. It can’t be produced by central banks, and it won’t be losing its global value anytime soon!
#Benefit 3: Diversification
The main benefit of a gold IRA is that it offers a unique kind of risk management for investors. If you want real diversification for your retirement portfolio, a gold IRA should be included. How much you buy is a personal choice, but with central banks creating money at levels never before seen in human history, a golden insurance policy is a good idea.
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