Gold investing tips beginners should know
Gold has long had a reputation as a store of value and a good diversification strategy, which may be appealing to some investors in today's uncertain economic climate.
But if you're just starting out, investing in gold may be daunting. There are multiple ways to invest in gold and the strategy you use can often differ from other investments you may already have.
Below, we'll outline tips that can help you understand gold as an investment option and find the best strategy for your goals. Get started now and learn more about gold with a free investors kit.
Gold investing tips for beginners
Here are a few tips to keep in mind once you've decided to invest in gold.
Choose the right type of gold investment for you
There are plenty of ways you can make your gold investment. One popular option is a gold IRA (traditional or Roth), which can help you diversify your retirement portfolio. These accounts have the same tax advantages as IRAs that hold stocks and bonds, but instead, you'll hold physical gold in your gold IRA. There are additional IRS guidelines to follow, too, including the type of gold in your account and the custodian who protects it.
If physical gold isn't the investment you're interested in, you can also choose to invest in other ways. Some options include gold ETFs or mutual funds, more speculative gold futures or buying stock in gold mining companies, to name a few.
Explore more about gold investing options for you with a free information kit today.
Choose a small allocation
One of the biggest benefits of investing in gold is the ability to diversify your investment portfolio.
Experts typically recommend keeping no more than 5% to 10% of your overall portfolio in an asset like gold. Gold is a good diversifier because it is thought of as a hedge against inflation and it has performed inversely to the stock market in the past, so it can help you weather the storm during market downturns.
However, you still want to take advantage of the growth you can get by investing in traditional stocks and bonds. Gold has increased in price over the long run, but it may not offer the same long-term returns as riskier investments.
Invest for the long-term
While gold doesn't offer the same returns as some other markets, it is generally a safe store of value. Its price tends to go up when the value of the U.S. dollar goes down, during periods of high inflation (like we've experienced recently).
"Since gold is a non-productive, speculative asset, its best use is in response to potential inflation concerns and as a store of value in the event of a collapse in the financial markets," Noah Damsky, CFA of Marina Wealth Advisors, previously told CBS News.
No period of economic downturn lasts forever, but over the course of several decades of investing, having an asset that can help you make it through those periods while mitigating losses can be useful.
Before you make any investment decisions, make sure you have a good idea of your long-term investing goals. It can help to speak with a trusted financial advisor about your individual situation if you're unsure.
Explore more about gold investing with a free investment guide.
The bottom line
Investing in gold can be a good way to get through economic uncertainty today and in the future. Use it to diversify your investment portfolio and as a stable asset to maintain your overall value when downturns occur. Just make sure the amount you invest and the investment type you choose fit your overall financial goals.
If you think allocating a portion of your investments could be the right move for you, start by learning more with a free investor kit.
