This is who should consider buying gold now

As investors try to navigate issues like rising interest rates, inflation, and geopolitical conflict, some people are turning to commodities like gold. Doing so could involve a variety of investment methods, like buying stocks of companies involved in mining, buying physical gold, or investing in assets like exchange-traded funds (ETFs) that hold gold bullion via a custodian.

But why buy gold in the first place? Investors can have different motivations for investing in precious metals like gold, with some looking more at the risk side of the equation and others looking more at the potential rewards. Or, you might find that a combination of reasons leads you to buy gold.

If you think you could benefit from buying gold in the current market then reach out to a gold expert now who can help guide you. You can start with a free wealth protection kit today. 

Who should consider buying gold now

In particular, the types of investors who could benefit from allocating part of their portfolios to gold include:

Investors who want to diversify their portfolios

Rather than having all your investments tied up in one asset class, like stocks, you might decide to buy gold to diversify your portfolio.

While there's no guarantee how different asset classes will perform, holding diverse assets can reduce risk and potentially increase gains. As some assets rise, others might fall, and vice versa.

So, rather than having to correctly guess which way markets will move, you might buy gold, along with other assets, so that your risk and potential gains are spread out across different types of investments.

Investors trying to hedge against inflation

In addition to providing diversification benefits, gold can also be used to potentially hedge against inflation. While the efficacy of gold as an inflation hedge can vary among different markets and different periods, in general, the thinking is that gold can retain or increase its value when purchasing power decreases.

Rather than holding cash that's eroding in value due to inflation, for example, more investors might turn to assets like gold to try to capture some upside.

If you think gold could help alleviate some of the burden inflicted by inflation then speak with a gold expert today who can assist you. 

Investors who want liquidity

Another reason why you might buy gold now is if you're looking for a relatively liquid investment. However, this liquidity depends on how you purchase gold.

If you buy gold coins, for example, then that might not be as liquid as you'd like, as it can take time to deliver the physical coins to a buyer. But if you invest in a gold ETF, for example, you can generally sell the investment during stock market trading hours and receive the cash in your bank account within a few days.

In contrast, suppose you tried to diversify your portfolio by investing in physical real estate. The time it takes to sell a house, for example, could be far longer than what it takes to unwind gold investments.

Investors looking for a safe haven

Some investors turn to gold for diversification to try to smooth out volatility and avoid getting too caught up in market swings. Similarly, gold could potentially act as a safe haven during difficult economic periods.

That's not to say that gold can't decline in value — it does at times. However, the risk profile is somewhat different than, say, investing in a startup that could go bankrupt.

An analysis by The Federal Reserve Bank of Chicago looked at the correlation between gold prices and responses to a University of Michigan study of consumers' economic expectations. The results show that when consumers have pessimistic expectations, there's a positive correlation with gold prices.

In other words, in difficult economic environments, you might invest in gold in the hopes that the asset will rise or at least retain its value.

Overall, there can be many reasons for investing in gold. Whether you're looking for diversification or a buffer against inflation and other economic stressors, gold might be a good fit for you. And if you want an asset that's relatively liquid, gold could also be a good choice, though keep in mind that there can be liquidity differences depending on how you invest in gold.

Have more questions? Contact a gold expert today who can assist you with this unique financial investment opportunity.