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Those who hope for signs that inflation was a constant cooling were disappointed last week after the latest report of the Ministry of Labour showed it unchanged in September. Stuck at the same 3.7% rate as it was in August, the Federal Reserve still has work to do to reduce inflation to its 2% target. And with the benchmark interest rate already a 22-year peakthat could mean more pain for borrowers thanks to another potential rate hike.
In this environment, many savers and investors are looking for ways to hedge their losses and protect their existing funds. One such way to do this is through investing in gold. Investing in the precious, yellow metal really hit home 11-year peak in September, thanks to various factors. But now is a good time to beginners to invest in gold, too? Or should they take a chance on other, better-known assets? We will discuss this below.
You can easily explore your gold investment options here now to learn more.
Is now a good time for beginners to invest in gold?
While gold can be a valuable asset many times in your life, it can be especially beneficial for those who are just getting started with their investments. Here are three reasons why now might be a good time for beginners to invest in gold:
It can diversify your portfolio
Gold can act as a great tool to diversify your overall portfolio, providing some safety when other assets such as stocks and bonds suffer shocks. When these assets fail to perform or lose value, the price of gold tends to remain stable and can help offset what would otherwise be a more significant loss.
However, investing in gold is just like any other investment in that it needs to be in the right amount to be truly worthwhile. While this amount will vary based on your age and overall investment profile, most experts recommend limiting your gold investment to 10% of your total portfolio.
Learn more about investing in gold here today.
It can help with inflation
One of the main reasons why gold has seen a rally in 2023? This is due to inflation. Or, more specifically, the help gold can provide during inflationary periods like the one we’re currently experiencing.
Gold can help hedge against inflation keeping its value relatively stable as the dollar’s purchasing power erodes. It’s not always an exact science — and it’s not infallible — but the price of gold, historically, tends to hold up well and can even increase during times of high inflation.
And compared to the performance of stocks, bonds and other assets, it can be especially valuable when inflation is still causing high costs of borrowing and everyday living.
It can be easily bought, stored and sold
Gold can provide some tangible benefits for beginners as well. It is liquid assets that can be held in the palm of your hand, weighed on a scale and bought, stored and sold around the world. While this may not be seen as an advantage by some, it can be for beginners who want to know exactly where their investment dollars are going.
Knowing that you don’t necessarily need a broker or bank to help you get in or out of this investment can be a big plus for many. Instead, you can easily sell your investment, often at a small profit, by taking a short car ride to a dealer or jeweler.
The bottom row
Gold can be a smart investment for young investors, older investors and even those just starting out. Thanks to its ability to diversify a portfolio, its well-known help against inflation and its use of ease of purchase, storage and sale, gold can be especially profitable for those who want to start building their profile. As with all investments, however, it pays to do your research and overview of companies in the market to ensure that the precious metal is the right type of investment for your individual needs and financial plan.