Should I Invest My Money in Gold Or Silver?
Gold is an admired precious metal, frequently sought out in times of market instability to hedge against currency depreciation or geopolitical and financial instability.
Physical gold and silver investments present significant barriers for investors, including storage and insurance costs. Therefore, many opt for exchange-traded funds that give exposure to gold and silver without the hassle of holding physical assets.
It’s a safe haven
Gold has long been seen as an investment asset during times of economic and political unease, due to its invulnerability compared to fiat currencies or assets with credit risk.
Forex may provide a useful hedge against inflation and currency risk, but should not be seen as a replacement for a well-diversified portfolio. Although currency trading might help protect against certain market downturns, according to research conducted by Baur and Lucey it does not deliver enough return for most investors and is too risky for many of them.
Many investors invest in gold to diversify their portfolios, yet before purchasing gold it’s essential to carefully consider your goals and investment strategies. Prior to making their decision, investors should consult a financial advisor in order to assess if investing in gold is appropriate for them and its associated risks such as storage and insurance costs. Furthermore, investors must watch out for fraudulent dealers who use high-pressure sales tactics such as boiler rooms that pressure people into buying coins or bars from them – this has been reported by the Federal Trade Commission (FTC).
It’s a hedge
Hedge investments serve to protect assets against the risk of loss by diversifying risk between investments. Gold has historically proven effective as an inflation hedge, helping savers maintain purchasing power over extended timeframes.
Gold’s ability to hedge inflation was best demonstrated during the 1970s, when oil price shocks and energy shortages drove annual inflation rates up to 8.8% a year – creating an incredible 35% return during this time.
Nowadays, investing in gold as an inflation hedge offers many options – physical coins and bars as well as ETFs that track its price are both viable options to consider before making your choice. At Kinesis Bullion we specialize in finding investment solutions tailored specifically for each client based on needs and budget – contact us now and start exploring your possibilities!
It’s a diversifier
Gold differs significantly from stocks and bonds in that it does not share strong correlations between asset classes. While it does not guarantee immunity from market volatility, it does provide some protection against inflation and global economic turbulence – thus serving as an excellent diversifier in an investment portfolio – though it should only ever replace other investments instead of acting as a replacement.
Some investors opt for physical silver investments, which offer many of the same benefits of gold at a more reasonable cost and portability. Silver mining stocks may provide greater diversification and dividend payments without needing to manage physical bullion as directly. It is important to remember that precious metals should only make up 10-20% of an overall portfolio; buying gold should only serve as one investment strategy among many.
It’s a form of insurance
Gold investment may provide some investors with financial insurance. When faced with economic instability, they hope the precious metals will hold onto their value; this approach, however, cannot always work; gold prices can fluctuate widely during times of crisis.
Investors may store their precious metals with an authorized depository or vault. Such facilities offer secure storage at a fee; additionally, many will provide insurance against theft of precious metals being stored there, which provides an added layer of security and peace of mind to investors.
Recent research demonstrates how adding gold to a portfolio can provide protection from investment risk while increasing returns. For instance, during the recent tech stock crash, just 10% allocation of gold significantly mitigated losses for an average retirement portfolio worth $1 million.