3 Top Reasons to Own Gold Now
Since the beginning of history, gold has been seen as one of the most respected and universally accepted stores of wealth. Today, gold is still seen as one of the best ways to preserve wealth and maintain purchasing power.
Many investors and retirees need to learn the importance of diversifying a financial portfolio with gold, and Allegiance Gold can be that remedy. For years now, the executives at Allegiance Gold have been educating on reasons to own gold and diversify retirement accounts into gold IRAs. If you are wondering why gold is a good investment today, take a look at three reasons why you should own gold and may want to consider adding gold to your current portfolio.
1). Acts As A Hedge Against Inflation
In his 2021 annual corporate meeting for Berkshire Hathaway, Warren Buffett said that he has seen some substantial inflation across all of his companies. Mr. Buffett has mentioned that his Berkshire companies have had to raise prices to deal with the rising prices his companies have had to pay for resources. All of these rising prices will lead to less purchasing power as the government prints more fiat currency. However, there is one thing that the government can not print – gold. Therefore, gold acts as an excellent hedge against inflation.
Let’s take a look at the last time that inflation ravaged the American economy in the 1970s. During that time, inflation was rising at about 6% per year. During that time, the stock market lost 49% of its value. How did gold do during these inflationary times? In 1970, the price of gold was sitting at $35.96 per ounce. By 1980, gold grew in value to $594.90 per ounce. During times of inflation, gold not only holds its value, but can also provide outstanding returns.
2). It Is Uncorrelated With Equities
If you have a stock portfolio, then you know that equities can sometimes take you for an extraordinary ride. In fact, if you have all of your money in the stock market, then you can experience up to 50% drawdowns on your portfolio. This can be nerve-racking for even the most experienced traders. By diversifying into gold, you can smooth out returns and allow your portfolio to be more bulletproof during times of market crashes.
For instance, if you have had 100% of your stock portfolio in the S&P 500 since 2005, your portfolio would have received a maximum drawdown of 50% during the 2009 financial market crash. However, if you had a 50/50 mix of stocks and gold, then your maximum drawdown would have been reduced to 26.13%.
3). Universally Accepted Store Of Wealth
No matter where you go, gold is accepted as a universal store of wealth. During times of war, political upheaval, and financial instability, people have accepted gold, without question, for thousands of years. Compare that with stocks and currency which can become worthless at any time. In fact, no fiat currency has ever survived for more than 300 years while gold has been an accepted store of wealth for over 5,000 years. For that reason alone, gold is an important component of any investment portfolio.
With inflation rising in early 2020, there is a real possibility that this inflation can turn into hyperinflation. If that happens, you could see the value of the dollar plummet overnight. That could make people panic and rush out to buy any gold that they can find. If you already have gold in your portfolio, then you will already be protected. For peace of mind alone, gold is a great idea to have in your portfolio.
Taking Advantage Of The Unique Investing Properties That Gold Offers
Gold offers long-term stability and an excellent hedge against stock market crashes and inflation. If you would like to invest in gold, then you can purchase gold bullion and store it in a gold IRA. With a gold IRA through Allegiance Gold, you will not have to pay capital gains tax until you sell the asset at retirement. By allocating some gold in your portfolio, you may enjoy wealth protection and possible capital appreciation that can help you reach your financial long-term goals.
Allow the executives at Allegiance Gold to show you the importance of diversifying your financial portfolio with gold. As you have read, there are valid reasons to own gold and incorporate it into your financial portfolio. Having a gold IRA can be beneficial in so many ways, especially in times of inflation. For more on owning gold, or starting a gold IRA, contact the executives at Allegiance Gold today. Make sure to ask about receiving your FREE gold IRA guide as well!