Is Gold and Silver a Good Investment for Retirement?
Most financial planners and investment advisers advise diversifying a retirement portfolio; whether precious metals should be included depends on an individual’s age and goals.
At SmartAsset’s free tool, SmartAsset connects investors with pre-screened advisors in their area who can assist them in creating an action plan to reduce risks in their future. Instead of investing solely in gold and silver investments, find an advisor who can help create an actionable plan instead.
Precious metals are a hedge against risk
Gold and silver investments have long been seen as safe haven investments. Although no longer used as currency, their historical ties still make them an appealing way for investors to diversify their portfolios with low correlations to other assets. Yet there can be risks involved with investing in precious metals; their price can fluctuate wildly without always moving in sync with stocks or bonds, making selling difficult at times.
Physical precious metal investments come with expensive storage requirements and storage costs, not to mention being vulnerable to theft. An alternative option for investing in gold and silver would be through ETFs or mutual funds dedicated to these precious metals – these products provide higher liquidity and reduced storage costs while providing no return or income generation.
One key consideration about gold as an inflation hedge is that its track record can vary significantly when governments implement policies to stimulate the economy, though it may do well during deflationary depression or other dire economic conditions.
They are a store of value
Investing in precious metals can be an excellent way to preserve wealth and protect against inflation. Before adding them to your retirement portfolio, however, it’s essential that you understand their performance under different economic climates.
Gold and silver investments do not offer dividends or interest payments like stocks and mutual funds do, making them less desirable investments for some investors looking for higher returns. But many people still believe investing in precious metals provides great diversification benefits.
Diversifying your retirement portfolio with precious metals can be beneficial, but this decision should be made after consulting an experienced advisor. SmartAsset’s free tool connects you with pre-vetted advisors in your area that offer no-cost consultation sessions so you can interview candidates to find one who matches your specific needs – start searching today.
They are a form of insurance
Many investors view precious metals as an insurance against economic uncertainty. As non-correlated assets that tend to perform well during times of political and economic instability, precious metals offer protection from inflation as well as any declines in currency values like the U.S. dollar.
Investor Implications: While silver may not perform as well in inflationary environments as gold, it is less prone to government-driven policies which cause deflationary depressions and more practical for everyday small purchases, as you do not need to sell an ounce of gold just to purchase toilet paper or a cell phone.
Precious metals can make an excellent addition to your retirement portfolio, but it is important to carefully consider your investment options before diving in. To gain more knowledge on investing in precious metals, consult a financial advisor – SmartAsset’s free tool connects users with qualified advisors who can answer all their queries about how best to invest.
They are a countercyclical asset
Diversifying retirement portfolios is highly recommended by financial planners and investment advisers to reduce the risk of money loss in market downturns. By including precious metals such as gold into your investments, precious metals could help safeguard them from an economic catastrophe.
Gold and silver have an established track record of outperforming stocks during times of political instability or geopolitical unrest, providing you with protection during periods of inflationary pressures. They’re also useful as anti-cyclical investments which help preserve purchasing power during this period of inflated asset values.
Physical gold and silver bullion is difficult to store and transport, not practical for everyday small purchases, making it less desirable than its alternatives such as options trading. Therefore many investors choose gold or silver options instead.
If you’re curious about investing in precious metals, connect with a Morgan Stanley Financial Advisor to understand how incorporating precious metals into your retirement strategy could help reach your goals. SmartAsset’s free tool connects you with advisors near your location – interview them without incurring additional charges in order to find one who best matches up with your requirements.