You may have seen the headlines about gold
prices breaking new records this year, or you may have seen that silver prices
have followed suit and demonstrated a high upside this year. Active investors
are always looking for new opportunities and new assets that they can include
in their portfolios. With bullion prices showing so much strength right now, bullion
has been gaining attention from investors looking for their next move.
The growth in bullion prices in 2024 is
likely related to two factors: inflation and interest rates. Demand for bullion
tends to rise when the United States Federal Reserve raises
interest rates. While other countries have their own interest rates, and
these changes can cause smaller reverberations around the market, Fed rates
have a global impact.
The second factor is inflation. Bullion is
seen as a very effective hedge against inflation. Inflation is the process of
money losing its value compared to goods. Bullion, especially gold, has
historically gained value alongside inflation, making it a better alternative
for saving wealth than keeping it in cash in a bank account.
Investing in bullion is an effective way to
protect your savings from inflation, stock market crashes, and economic
uncertainty. You can get started right away by buying physical bullion. Here’s
what you need to do to get started:
There are a number of businesses that sell
gold and silver bars and coins directly to retail investors. A trusted source for bullion
investments will be transparent about their pricing and should also help
first-time investors learn everything they need to know about premiums,
different products, and more.
You’re also going to want to find a secure
way to store physical bullion. You can either opt to store bullion at home or with
a third party. If you’re opting for home storage, consider buying a home safe.
If you’re going with a third party, look for allocated storage, where your
bullion is kept separately from bullion belonging to other investors.
Finally, make sure your investments are
protected from theft, fire, and natural disasters by getting it insured. Home
insurance policies may not be enough to insure bullion investments, as they
often come with coverage limits for valuables.
You can get started with any amount.
Counterbalancing a stock-heavy portfolio with an alternative is never a bad
idea, and even if you only have the money to make a small bullion investment,
you can think of it as a starting place.
The benefit of investing in bullion is portfolio
diversification, which means that you have money in various different
assets. One downturn should not impact all of your savings. Putting about 5 to
10 percent of your total portfolio into bullion will help you diversify your
investments without becoming over-exposed to the asset.
Bullion is a useful tool for investors
adding something to their portfolio outside of the typical mix of stocks and
bonds. Used wisely, it can help protect your investments during economic
downturns.