3 gold investing moves to make with inflation in mind
Inflation may be lower than what it was, but there's still work to be done, at least according to the latest inflation report released this week. With inflation stuck at 3.7% — almost two points higher than the Federal Reserve's target of 2% — there is still some ways to go.
One effective way many have turned to in 2023 is gold. In fact, gold investing recently hit an 11-year high, largely due to the economic effects of inflation. And it's easy to understand why. Gold can provide a much-needed hedge against inflation, remaining relatively stable when other asset classes falter. And it can diversify investor's portfolios in a way that other assets can't.
That said, there are some smart gold investing moves to make with inflation still at the top of mind. Below, we'll break down three of the most important ones to know.
3 gold investing moves to make with inflation in mind
While gold can help battle the negative effects of inflation, there are some ways investors can more successfully accomplish this goal. Here are three gold investing moves to make with inflation still humming along in the background.
Keep your investment conservative
It may be tempting, based on your stock's performance as of late, to heavily invest in an alternative like gold. But that would be a mistake. Gold can offer valuable protection against the negative repercussions of inflation, but it can't perform many of the tasks that other, more volatile assets can.
Accordingly, you should keep your gold investment conservative. Most experts recommend capping it at just 10% of your overall portfolio, but that figure may be even lower depending on your age, goals and long-term investment horizon.
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Explore all types
Sure, you can easily call up a top gold company and purchase gold bars and coins over the phone right now. And for many investors, particularly seniors, that may be a valuable way to go about investing in gold. But for many others, it's worth taking the time to explore all gold investing options available. Particularly, you'll want to look into gold IRAs, gold ETFs, gold stocks and even gold futures. By knowing all of your options, you'll be best positioned to invest in the right one for you.
Understand what you're trying to achieve
Gold can be a great investment, but it's not a miracle worker. So don't turn to the precious metal when expecting huge returns. Instead, gold acts less as an income generator and more as a way to protect your current investments. When those fall short, gold tends to hold its value, keeping your overall portfolio safer than it would have been without it. But if you go into a gold investment hoping to sell it quickly for a profit, you're unlikely to do well. In short: Understand what you're trying to achieve with a gold investment first, and then get started.
The bottom line
With inflation cooled but still persistent, many investors are exploring alternate ways to protect their bottom line. Gold can be one such effective way. But there are things to keep in mind when battling inflation with gold. Specifically, investors should keep their gold investment conservative and explore all gold investing types before getting started. They should also familiarize themselves with what a gold investment can and cannot do so that they can better tailor the precious metal to help them achieve their goals.
Ready to get started with gold? Learn more here today.
