Why Every Investor Should Diversify Their Portfolio With Gold
Editor’s Note: Here at Profit Trends, we are strong advocates of diversifying your portfolio with gold and other alternative investments.
And today, Chief Income Strategist Marc Lichtenfeld, Editor of our sister e-letter Wealthy Retirement, is here to provide even more evidence for why you should invest in gold – especially in the years ahead. With the recent gold shortages, the value of this precious metal is going to rise fast.
Read on for Marc’s insights!
– Kaitlyn Hopkins, Assistant Managing Editor
Gold seems to make headlines every day now.
If you don’t own any gold, should you buy some now? If you do already own some, should you buy more?
I’ve never been a huge gold bug. You’re supposed to own gold for a number of reasons, including having it as a store of value when the spit hits the fan.
Some claim that with countries, especially the U.S., printing money as fast as possible, ballooning the debt and devaluing their paper-based currencies, gold is the only real money.
But gold doesn’t generate dividends or produce cash flow and is worth only what the next person is willing to pay for it. As you may know, I like my investments to pay me cash on a regular basis.
That being said, I do believe gold belongs in your portfolio – especially right now.
Over thousands of years, gold has more or less kept up with inflation. There’s an old axiom that an ounce of gold typically has the same value as the price of a man’s quality suit.
Obviously, the price of gold will have strong moves higher and lower, but over time, that is generally perceived to be the value.
I have reason to believe that it could go even higher THIS year.
But that is precisely why you should own a little bit of gold. Because it does make these very strong moves higher when conditions are right.
And right now, the conditions are right. There is currently a MASSIVE gold shortage. Try calling a gold coin dealer and see what kinds of premiums they charge you – that is if they even have any gold coins to sell.
Gold allows you to diversify your portfolio in a way that is not correlated with stocks.
Right now, stocks keep ticking higher, yet the price of gold recently hit a 10-month low. And that’s a good thing. It allows investors to add gold or gold-related assets at low prices.
It’s smart to have assets that don’t move in conjunction with each other in your portfolio. That way, there is always something working, even when markets are weak.
Gold is one of those noncorrelated assets.
Despite the fact that I am not a huge gold bug, I own some gold for this exact reason.
With the money printing press working overtime all over the world and inflation starting to tick higher, it makes sense to own gold or gold-related assets, which are noncorrelated to the stock market, in your portfolio.