Diversify You Portfolio with Precious Metals
Updated: Nov 19, 2019
If you are building a portfolio you probably have heard about diversification. Unless you want to be one economic crisis away from financial ruin, you want to have a diverse portfolio. The misunderstanding with this concept is that when most specialists talk about diversification, they either mean buying diverse stock, different income solutions such as bonds or even in some circles, volatile assets like cryptocurrency.
This is standard investment advice and is common amongst Financial Advisors and clients alike. The issue we have with this train of thought is that there is nothing about an individual’s portfolio that should be standard fair. Innovative thinking and customization to suit individual needs is the correct answer. Instead of jumping through the same hoops everyone else is jumping through and listening to the same hashed out advice over an over, you might want to consider thinking outside the box and avoid the herd mentality. Ironically, this would entail using an old method of portfolio diversification: Precious Metals. Even though we believe silver is a good option and has its own merits, gold is the king of precious metals. Not many people have gold in their portfolio which seems crazy these days, as gold has plenty of net positives and more interestingly Gold IRAs share those same positives without the hassle of storage.
For example, did you know that gold has a historic relationship with wealth. For over 3000 years, gold has been used as a way to hold and transfer wealth between people. It has been used for such a long time that everyone knows what gold is about and whether gold is worth something of value. Most people don’t know how stocks, bonds, and cryptocurrency are valued. But if you put gold on the table, everybody is willing to bet it’s something serious.
Gold has been -historically- the only nonvolatile asset known to man. We can count the many times the stock market has come close to going “belly up” or how many countries have defaulted their debts resulting in junk bonds, the same way we can point to gold as maintaining and preserving wealth for millions. Gold has always held its value.
Fiat currency is another example. Just like stocks and bonds, currency also has its ups and downs. Currently, the U.S. dollar inflation is close to 2%. That means every dollar you own loses 2% of its worth every year that sits alone in the bank. Gold, on the other hand, has gone up 15% between October 2018 and October 2019. That is, without saying, that gold is recession-proof. Between 2008 and 2009 -during the last American economic crisis- gold went up 27%. And between 2009-2010? Another 27% increase.
Gold has been in high demand in western countries for centuries. But something unusual is happening. With the economic rise of sleeping giants like China and India, gold demand has increased significantly. Both Chinese and Indian people have begun to buy gold regularly, increasing its value worldwide. The worldwide supply of gold is also shrinking every year. With growing demand and a supply decrease, price projections are higher than ever.
Considering its tendency to gain value over time and as the public knowledge about gold intensifies, this precious metal will continue to have the upper hand over many other “alternative” investments. Gold is tangible. It’s value is in itself, not for a country or a company’s performance. And if you have gold with you, you will always have the possibility of commerce. Even in a worst-case scenario where the dollar falls, gold will remain as the standard on where commerce is built. This also translates into liquidity. As soon as you want to change your gold for cash, you can do so, no matter where you are. It doesn’t matter if you are in America, China, Russia or a third world country, gold can always be sold for local currency unlike stocks or bonds in your portfolio.
When you consider that gold is historically valued, well known, recession-proof, a protection against inflation, in high demand and is a tangible, liquid asset it seems like a good idea to -at least- consider buying physical gold, as a great strategy for portfolio diversification.
In our opinion, there is no better way to invest in gold in the 21st Century other than a Precious Metals or Gold IRA.
If you decide that a Gold IRA or a Gold 401k rollover or maybe even a transfer may be right for you and you want to learn more we encourage you to request more information from Regal Assets. They will send you a free, no hassle Gold Investment kit once you click on the link below.
To see a review on Regal Assets, visit our site at GoldIRAs101.com We have personally used these guys for our gold investment purposes and highly endorse them.
The Gold IRAs 101 Team