7 reasons to buy gold bars and coins

Investing in gold is a popular way for investors to secure and preserve their wealth. Gold has been prized for thousands of years, and in today's precarious economic environment, it's especially valuable for the stability and predictability it offers.

There are many ways to invest in gold, from stocks and futures to IRAs and ETFs. But the most traditional form of gold, physical gold (or bullion), is still a viable option, and one some investors may prefer. To decide if investing in gold bars and coins is right for you, it's important to know the benefits it can offer your investment strategy.

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7 reasons to buy gold bars and coins

Whether you're a seasoned investor or a beginner, there are several reasons to consider buying gold bars and coins.

They diversify your portfolio

Diversification is crucial in investing because it helps to reduce risks. Owning gold alongside more-volatile assets like stocks helps to balance your overall portfolio risk while still allowing you to enjoy the potentially higher returns of these assets.

Gold prices are typically not correlated with other investments like stocks and bonds, and gold often performs well in times of economic uncertainty. This makes it a great way to protect your portfolio from losses.

They're a store of value

Gold has been valued as both a currency and a commodity for centuries, and that's not likely to change any time soon. It's globally recognized and used in everything from jewelry to electronics, making it an asset that's always in demand. That's why central banks, institutional investors and governments hold gold as a reserve asset.

They offer stable returns

Gold is a safe haven when markets are volatile. Gold's value is not affected by economic and political changes in the way traditional investments are. In fact, the price of gold bars and coins tends to rise when times are tough. For this reason, gold can be seen as "insurance" against times of recession or other economic hardship. By owning gold, you are less exposed to fluctuations in the market.

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They hedge against inflation

In times of inflation, the value of the dollar diminishes as the cost of goods and services rise. However, gold tends to remain stable — if not increase in value — during inflation. This can help you preserve your purchasing power and limit inflation's impact on your returns.

They're highly liquid

Gold bars and coins provide an easy and straightforward way for investors to access their funds in case of an emergency. They are highly liquid compared to other assets, which means you can sell them quickly for cash anytime you need it.

They're tangible

Gold bars and coins are physical assets you can touch, hold and inspect. This can provide investors with a sense of security that more-abstract assets, like stocks and cryptocurrency, cannot.

In addition, gold bars can't be hacked or stolen by cybercriminals. You can insure and store them in a secure location like a safe or vault, where you know precisely where they are at all times.

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They hold sentimental and historical value

In addition to its investment benefits, gold offers a level of prestige that other assets don't. It's long been considered a symbol of wealth and status, which can give investors a sense of satisfaction not found with other assets.

Collectors can enjoy the cultural and historical significance of coins. The thrill of finding and acquiring new pieces and appreciating their artistry can make investing feel even more rewarding.

The bottom line

Gold bars and coins have plenty of benefits to offer investors. If you're ready to start investing in them, take the time to understand the differences between the two options, research current gold prices and find a reputable dealer to do business with. With a smart approach and an eye toward your larger investment strategy, you can enjoy the payoff of this investment for years to come.