Nothing is guaranteed in the business world. Any time you invest you’re taking on a risk that the assets you buy will be worth less than what you paid. But a smart investing strategy can also put a lot of money in your pockets.
Many people who want to grow their wealth are attracted to the idea of investing in gold, but they come with a lot of questions. Gold has a lot of enthusiasts who sometimes make some hyperbolic claims about the future price of gold. You can find the same salesmen touting any investment. The truth is, gold is as good as any other asset if you know how to use it and when to buy.
#1 Investing in a Safe Haven
Gold is often considered a safe haven asset. When the markets enter choppy waters, investors move their wealth into safe havens like gold. These are assets that tend to maintain their value in the long run, weathering downturns, crashes, and high inflation fairly well. The problem is timing. Once there’s a noticeable trend of moving money into gold, everyone starts doing it and the cost of entry goes up.
One of the great investment tips from the pros is to always keep between 5 and 20 percent of your portfolio in gold. That puts you in a better starting position when markets start to shift.
#2 Investing for Returns
Investing in gold for returns is sometimes compared unfavorably to the stock market. Gold doesn’t deliver dividends or income and some investors say that the stock market performs better. When stock markets are doing as well as they were in 2017, your money will grow faster in stocks. That’s because gold and stocks have an inverse relationship. When stocks are doing well, few people are interested in gold, often considered a fear asset. But as soon as the market hits the rocks and investor confidence is shaken, gold takes the lead.
Stop comparing gold to stocks. Buying gold is a bet against the stock markets. A strong position in gold also means you have an opportunity to grow your wealth while everyone else is scrambling to stop losing money on stocks. Gold is how investors get ahead during market downturns, but to take full advantage of an upswing in prices, you need to be ready ahead of time.
#3 RRSP Gold
Buying gold as part of your RRSP gives you a great tax advantage. Canadians can buy RRSP gold through Silver Gold Bull, already a source of gold bullion at low premiums. Buying gold as part of your RRSP (or your TFSA) can help you build your retirement fund with a low-risk asset. Gold performs well against inflation and it’s an effective way to protect your retirement.
If you’re ready to make gold part of your portfolio, check out gold bullion products at Silver Gold Bull. High purity gold bullion offers you more protection from risk than just about any other asset. Skip ETFs and go straight to the real thing.