Growing your wealth seems easy when the stock market is on the rise, and real estate is skyrocketing.
Under those conditions, it can seem like there’s no end in sight for the growth of your portfolio. But part of creating lasting wealth that can benefit you in your retirement or even be left to your loved ones as an inheritance is finding a way of weathering the downturns.
Preserving and even growing your wealth when other parts of the economy are struggling is the key to coming out ahead. To that end, a growing number of investors are buying gold as a way of riding out the storm, particularly during difficult markets.
Gold offers a number of qualities that make it a safe haven asset ideal for surviving everything from recessions to market crashes. Investors are seeking out gold bullion for sale as a defensive maneuver to protect their wealth in times like these.
Remember, growth is never guaranteed, and downturns are inevitable. The best portfolios are prepared to handle periods when the economy is in retreat.
Gold Is A Hedge Against Inflation
After decades of low inflation and low-interest rates, people are reeling as they face the highest inflation rates in 40 years. The cost of living is skyrocketing as price growth becomes untenable, hitting food, fuel, cars, rent, and essentials.
High inflation means that paper currency is rapidly losing its purchasing power. The rising price of goods means that the dollar is on the decline.
During periods of high inflation, commodity prices tend to rise because they are the materials that consumer goods are made from.
Not only does gold also tend to perform this way, but it’s the commodity best suited to function as a store of wealth, thanks to its historical role in currency.
Gold Prices In A Volatile Stock Market
Finding the relationship between assets is a complex task, and there are not necessarily definitive answers.
However, it’s widely agreed that gold and the stock market have either little correlation or an inverse correlation. That means gold prices are largely unaffected by stock markets or may even rise when stock markets crash.
Investor sentiment for gold becomes more bullish when stock markets become a losing gamble. Gold supply struggles to keep up in the best of circumstances as deposits become rarer and harder to find, so rising demand tends to mean rising prices.
Gold Stabilizes Long-Term Wealth
Savvy investors put their money into any opportunity that looks to gain them a good return, but part of their interest in gold lies in its long-term staying power.
Many investments require constant attention. A good opportunity one year might be a flop the next. They need to pay attention and actively monitor and adjust their portfolios.
When they’re planning their long-term wealth, they want assets that they don’t have to worry about from one day to the next.
Gold provides a stabilizing force for their wealth, and it can make a lot of sense for wealthy investors to set aside part of their sprawling portfolios for the metal.
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