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It’s never a bad time to reassess your financial health and investment strategy. This is especially true in today’s unique economic climate with strong job growthelevated inflation and the highest interest rates in decades. Against this background, some investments may be more profitable than others. For many, recent economic developments have highlighted the advantage of investing in gold.
Thanks to its ability to hedging against inflation (holding its value during turbulent economic times) and diversify portfolios (when other assets fail), investing in the precious metal has increased, reaching 11-year peak last September. And on the price of the precious metal has broken multiple records in recent weeks. But while it’s important to know the nuances of investing in gold and the benefits it offers, it’s also important to avoid some simple (but easy to make) mistakes. Below, we’ll detail three gold investing mistakes you should avoid right now.
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3 Gold Investing Mistakes to Avoid Right Now
Here are three missteps to avoid with a gold investment today.
I don’t invest at all
In addition to the inflation and portfolio diversification benefits that gold has traditionally offered, the current climate also offers investors a rare opportunity to make a quick profit. Although it is not generally known as an income-bearing investment (rather it is protected asset to protect your other classes), the cost of the metal has jumped from March 1. It rose hundreds of dollars an ounce during that time and many experts expect it to increase even more. So don’t make the mistake of skipping this investment entirely. By acting now, you will not only secure the traditional benefits of gold, but you can also position yourself to potentially earn a quick return.
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Investing in the wrong type
As beneficial as gold is, you can easily reduce these benefits by investing in the wrong kind. Gold comes in different forms from gold IRAs to gold bars and coins to gold ETFs and more. Each type has unique pros and cons, and some (like physical gold, which is easy to buy and sell) may be better than others (like gold reserves which are difficult to manage and predict) in today’s climate. So invest, but take your time to choose the best type for your individual needs and goals. And don’t forget to read everyone’s reviews best gold companies so you can improve your chances of success no matter which type you end up choosing.
Overinvestment
In times of inflation and higher costs such as we are currently experiencing, it can be tempting to over-invest in assets that can help offset losses felt elsewhere. But don’t make this mistake with gold. Since the precious metal is usually a way to help other assets rather than grow at the same rate, it is important not to invest too much in the precious metal. Most experts recommend limiting the gold portion of your portfolio to a maximum 10%but the difference between 1% and 10% will largely depend on your specific investor profile. Just don’t be tempted to invest more than this limit to let your other assets run free.
The bottom row
Now is a great time to invest in safe-haven assets like gold. To get the most out of this unique asset, however, beginners should avoid some simple mistakes. They should not completely pass up the investment in favor of other, less reliable types, but at the same time they should not over-invest and crowd out the benefits that other assets can provide. Finally, prospective gold investors should do their research to ensure they are putting their investment dollars into the best type of gold investment for their needs. By taking these steps and avoiding these mistakes now, investors can greatly improve their chances of gold success both now and in the future.
