What Investment is Better Than Gold?
Gold remains one of the premier investments, serving both as an economic store of value and protection against inflation.
Gold has long been used as an inflation hedge, increasing in value as the purchasing power of the dollar declines. But there are other investments such as Treasury TIPS which could also offer similar protection.
1. It’s a store of value
Gold has long been seen as an asset that serves as an inflation hedge and store of value, typically rising when paper investments decline. However, when it comes to protecting against inflation there may be other viable solutions than gold alone.
Gold may not offer an income stream like stocks and bonds do, and its storage can present its own unique set of challenges. But investing in gold can diversify your portfolio and reduce overall risk, so if making major financial decisions it is advisable to consult with a qualified financial professional prior to taking any major actions.
Many investors turn to gold as an insurance policy against inflation and economic volatility, but is this really the best investment choice?
2. It’s a hedge against inflation
Gold bullion coins or ETFs are widely considered effective tools against inflation, since gold’s intrinsic value means it won’t lose its purchasing power over time. Paper currencies depend on central banks for inflation protection while gold retains its purchasing power for an eternity.
Addition of 5-10% to your portfolio as gold investments is often recommended, though investors must remember this may not provide guaranteed protection from inflation. Wise investors may find greater returns through purchasing Treasury notes or TIPS with built-in inflation protection.
Keep in mind that gold does not produce any income and that any returns from your initial investment will merely reflect an appreciation in value over time. Therefore, diversifying your portfolio with stocks, bonds, real estate or any other form of asset could help provide better protection and returns than investing exclusively in gold.
3. It’s a safe haven
Gold has long been considered an economic safe haven asset because it can hold its value despite economic upheaval, particularly during times when geopolitical tensions escalate, leading to rising oil prices and inflation. Gold also tends to fare well during financial crises or recessions.
Investors searching for a way to diversify their long-term portfolio should consider adding gold as an asset diversifier, while keeping in mind there may be more reliable protection against inflation available – Treasury inflation-protected securities (TIPS).
Though investing in gold may seem appealing as a safe haven, it’s essential to keep in mind that other assets like stocks and bonds are more liquid than it. Liquid investments like stocks can easily be turned into cash when disaster strikes; rare artwork or collectibles might prove more challenging – thus liquidity plays a key role in protecting against financial disaster.
4. It’s a good investment
Gold has long been used by investors as an asset that helps diversify their portfolios during times of economic instability, providing an effective hedge against inflation. 2023 investors are beginning to recognize this fact.
However, it’s important to keep in mind that gold does not generate passive income such as rental income, interest or dividends and does not offer as low a risk as Treasuries or government bonds with fixed rates of return adjusted for inflation.
Gold investing may be worth your consideration in the long term, but it’s essential that you thoroughly weigh its pros and cons before making a decision. Your individual investment goals and risk tolerance will ultimately dictate whether gold fits into your portfolio or not. If you want more information on adding it now, request our complimentary information kit now – this includes everything needed to start investing!