How gold can help young and older investors
Economic news in recent days hasn't been encouraging. Inflation is still problematic, if lower than what it has been. Interest rates were raised again last week, the tenth time they've been bumped up since March 2022. And that's against the backdrop of a looming recession. Many Americans are understandably concerned about their investments in this environment and may be looking for alternatives.
One option they may want to strongly consider? Gold. The precious metal has long been considered a wise investment, whether via jewelry, bulk or other forms like IRAs and ETFs. As with most investments, however, the timing needs to be correct. You don't want to get in too late and buy when the price is prohibitive. But you don't want to act too hastily, either.
To this point, it's helpful to understand how gold can help both young and older investors. If you're considering gold investing then start by requesting a free investors kit to learn more.
How gold can help young and older investors
Gold can be a helpful investment to add to your portfolio, albeit for different reasons for different investors. Here's how it can help both young and older investors.
Young investors
Younger investors are further away from retirement age, thus giving them more flexibility to experiment with their portfolios. For this age group, gold is worth trying to see how helpful it can be when other investments like stocks and bonds underperform (as they have been in recent months). Gold prices typically remain consistent (although they've been near record highs in recent weeks). But even if they were to fall off, younger investors could be better positioned to endure the volatility versus senior investors who likely require more reliable, income-producing investments.
Besides the portfolio diversification gold provides, it can also help act as a much-needed hedge against inflation. Look to prior inflationary time periods for proof. In the 1970s, for example, the average interest rate started at around 5.84% but ended at around 14% in 1980. During the same period, NASDAQ shows, the value of gold actually increased from $35 a share to more than $800.
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Older investors
Seniors and older investors should be judicious about where they invest their money. Investors in this age range are often on a tighter budget, relying on retirement funds and Social Security benefits. That said, gold can be a smart investment, particularly if it's done in the right amount (most experts recommend 5% to 10%, depending on your personal circumstances).
It's true that gold isn't really an income-producing investment. But those asset types, like stocks, had a terrible 2022 performance, so it's at least worth investigating other options. At a minimum, older investors won't lose as much as they may when the stock market underperforms. Gold will continue to serve as a store of value. Investors in this age group are just unlikely to exponentially grow their money by investing in gold — it will likely remain unscathed. For older investors, however, that may be worth it versus taking a chance with the stock market, particularly in today's environment.
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The bottom line
In today's economy, just investing in stocks may not be enough. For young and older investors alike, alternative investments like gold may be worth pursuing. Gold prices have actually been rising lately, making now a good time to act to potentially make more money. While the benefits of this type of investment are particular to the individual, the age of the investor shouldn't necessarily be a disqualification as it can help investors of all ages, just for different reasons (and via different strategies).
