If you’re interested in adding gold to your portfolio, then you’ll need to understand how to buy gold and how to do so correctly. But first, you need to understand why gold is a trusted asset among investors.
Throughout this article, we’ll explain the history of gold’s value and why it has been a proven and trusted safe-haven asset for hundreds of years, especially during economic hardships.
With record-high inflation, ongoing Fed rate hikes, and the debt ceiling crisis, more investors are becoming interested in using gold to diversify their portfolios.
Let’s take a look at some of the reasons gold could help preserve and grow your hard-earned retirement savings.
Gold is a Stable Investment
Gold has been used as a form of currency for hundreds of years. However, unlike paper currency or coins, it has maintained its value throughout those years.
When the value of the U.S. dollar drops, the price of gold tends to rise.
According to Investopedia, the price of gold nearly tripled from 1998 to 2008, rising to its $1,000 per ounce milestone. The metal then nearly doubled from 2008 to 2012, hitting above $2,000.
Furthermore, while other investments struggle to retain value during economic downturns, gold remains stable.
Historically, the yellow metal has demonstrated a low correlation with other asset classes. This means that when other investments in your portfolio drop, gold could act as a counterbalance to help mitigate losses.
Gold is an Inflation Hedge
Gold is seen as an excellent inflation hedge. Why? Well, as our cost of living rises, so does the price of gold.
When faced with economic turmoil, central banks may implement quantitative easing and fiscal stimulus to boost the economy. Those policies could lead to inflation and the devaluation of the dollar through money printing.
Paper currencies, like the U.S. dollar, can be printed on demand, which weakens their value due to the sheer volume of them in circulation.
However, gold can’t be printed. It’s scarce. There is a limited supply of it, which drives its demand and pricing.
Furthermore, since gold is seen as a good store of value, investors may flock to gold when they feel their fiat currency is losing value.
Gold is a “Crisis Commodity”
Gold is often a popular asset during times of geopolitical uncertainty because it can hold its value.
The yellow metal is often called a “crisis commodity” because investors see it as a safe haven when world tensions rise.
The bullion also rises when confidence in the U.S. government is low, as we’ve seen during the COVID pandemic.
Gold is Tangible
One of the reasons gold is a popular asset is because it’s tangible. It can be held, seen, and stored.
It’s also a liquid asset that can be turned into cash quickly.
How to Buy Gold With Red Rock Secured
So, you’re interested in adding precious metals to your portfolio, but how exactly do you buy gold?
At Red Rock Secured, we are committed to helping hard-working Americans protect their retirement savings by converting their conventional IRA into a Self-Directed IRA that can legally hold precious metals.
This type of IRA could help protect your hard-earned wealth from inflation and economic volatility.
Red Rock Secured offers several options for your precious metals purchase, including our Depsotiry IRA and cash transactions.
With our Depsotiry IRA, we’ll help you convert a percentage of your savings into a Self-Directed IRA that can legally hold precious metals tax and penalty-free (IRS CODE 408(M)(3)). Your Depository IRA is administered by industry-leading custodians who oversee all of your asset purchases and liquidations. Red Rock Secured will ensure that your metals are being stored in a top-tier depository with state-of-the-art security. You’ll have the option to select your preferred location, and your metals will be 100% insured by Lloyd’s of London for up to $1 billion.
Our team of gold and silver specialists is ready to help explain and walk you through either process. Just fill out the form on the top right of this page to get started.
About the Author
