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How investing in gold can elevate your portfolio

Gold is an important asset that has retained its value throughout history and serves as a reliable store of wealth. In addition to its historical significance, gold has developed a place in many investors' modern-day portfolios for those looking to add stability and ‘investment insurance’ to their other asset classes. Let’s take a look at the benefits gold can bring to your portfolio and how you can make sure the precious metal is part of your investments.

How investing in gold can elevate your portfolio

Image credit: BullionVault


Three benefits of holding gold in your portfolio: 

Although gold isn’t going to produce an ongoing income like a stock or a bond may, there are many reasons why adding gold to your portfolio can be a smart investment in the long run.


Diversification


Holding physical gold within your portfolio helps support diversification. It can act as a hedge against investment risk to help protect your portfolio against the volatility sometimes found within other asset classes like stocks, real estate and bonds. 


Protect against inflation

The intrinsic value of gold stems from its limited supply. It cannot be printed at an accelerated rate like other traditional currencies can. This helps it act as a hedge against inflation. It is worth noting that this has not always been the case; between the 1980s and 1990s, gold lost nearly four-fifths of its real value. This is why you’ll benefit by keeping gold as part of a diversified portfolio, and not over indexing one way or the other. 


Security for a rainy day


In times of geopolitical tensions, economic crises, or market downturns, investors flock to gold as a safe-haven asset, something uninfluenced by the economy as a whole. Its perceived stability and intrinsic value make it an attractive option for wealth preservation during turbulent times. This is due to gold being a highly liquid asset that can be easily converted into cash. 


How can you start investing in gold? 


Whilst many investors prefer to keep their gold easily accessible within their property, there are numerous ways to invest in gold, each with their own drawbacks and benefits. 


Physical Gold: This involves purchasing gold in various forms (coins, bars, jewellery etc) through dealers. This is a popular choice but it does mean you have to find a storage solution and consider insurance. 


Gold ETFs and Mutual Funds: This involves investing in funds that give you exposure to the gold price without actually owning the physical gold yourself. 


Gold Stocks: Similar to ETFs, this allows you to gain exposure to the gold market without owning the physical gold. Instead, you select specific mining/gold stocks to invest in. 


Vaulted Gold: This method means owning gold that is stored in a secure vault through a company like BullionVault. You do not store the gold yourself so can easily buy and sell it online and as you own the gold, you should always have the option to withdraw it from your investments.


Gold is a prized asset that offers many benefits to those who choose to invest in it. It preserves its value over time and offers some investment insurance to those looking for greater stability within their portfolio. Of course, always do your research before making investment decisions. 



This content is for informational purposes only and should not be taken as financial advice. Always consult a professional before making any investment decisions. Remember that investing involves risks and is not suitable for everyone. Past performance is not indicative of future results.


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