Billionaires Are Buying Gold, But Should You?

In recent years, many billionaires across the globe have quietly invested large parts of their wealth in gold. Seeing this trend has led many smaller investors to wonder whether gold or precious metals should be a part of their portfolio.

Gold has long had an almost timeless value, but the question remains: Is investing in gold wise in today’s economy? Let’s look at the facts. 

Gold gives you financial stability

One of the major reasons you see so many wealthy people putting a portion of their fortune’s in gold is that it offers stability. Gold has historically performed well when the economy and stock market has faltered. In addition to it’s historical success as an independent investment, gold also acts like an insurance policy for your retirement portfolio.

Gold offers your portfolio true diversification

A diversified portfolio is an essential part of being a savvy investor. However, you cannot have true diversification without an investment in an alternative asset, like gold and precious metals. Spreading your wealth across stocks, bonds, and real estate offers you some diversification, however all of these markets are tied together. In the event of a recession or a crash, all major traditional investments have historically been adversely affected together. 

In 2008, we saw retirees or Americans nearing retirement lose a large percentage of their retirement accounts. Many retirees no longer had enough money to sustain their retirement, and many nearing retirement had to continue working past retirement age. Having a percentage of your portfolio in an asset that is not tied to traditional markets gives you true diversification.

Countries are hoarding gold at a record rate

Gold is often laughed off by mainstream investors and the media as outdated with no place in the modern economy. However, if you look at the number of major countries stocking gold it paints a very different picture.

According to a Forbes report, the top 5 countries with the most gold are:

  • United States – 8,133 tons
  • Germany – 3,381 tons
  • Italy – 2,451 tons
  • France – 2,435 tons
  • China – 1,797 tons
With many major countries hugely invested in gold, everyday investors should take notice.
 

Gold offers a hedge against inflation

Last month the inflation rate reached a 6 year high. The price of goods and services are going up, and your money buys less than it used to. Rising inflation is something that threatens every middle class American. Gold offers you a hedge against inflation and protects your retirement account.

Be smart about buying gold

There are many different ways to invest in gold. The safest way is to open a Gold IRA. A Gold IRA not only keeps your gold safely and securely in an IRS approved IRA, it also offers you significant tax advantages. It is important to choose a trusted Gold IRA company with high ratings and positive reviews.

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