Dec 15, 2015 10:30:00 AM / by Mike Joyce


Gold is your wealth portfolio’s insurance policy. Just like you wouldn't own a home without insurance, you shouldn't have a portfolio without gold. Owning gold bullion or coins is not about making a huge profit, it is about minimizing risk to the downside. Still not sure if adding gold to your investment portfolio is for you? Here’s a few things to consider:

#1 Gold Goes Up When Everything Else Goes Down

Unlike the stock market, gold has traditionally been viewed as a safe investment that climbs in value during times of geopolitical crisis or political instability. This is because its price tends to rise during inflationary periods, when consumer prices are increasing. Essentially, as the cost of living increases, the value of an investor's gold holdings to as well, protecting purchasing power.

In the 20th century, the five years in which U.S. inflation was at its highest were 1946, 1974, 1975, 1979 and 1980. During those five years, the average real return on the Dow Jones Industrial Average was -12.33%, compared to 130.4% for gold. This was great news for those who held gold during those times.

#2 It’s a Great Way to Diversify

Any smart investor will tell you that diversifying your portfolio is essential to protect yourself against a large fall. Investment opportunities can be positively correlated (both increase together), negatively correlated (one increases when the other decreases), or non correlated. You want a portfolio of non correlated assets, like commodities and bonds, so you don’t lose big in a short amount of time. Lucky for those who hold gold, the statistical correlation between gold and any stocks is typically zero; a stock market crash won’t affect your gold bullion.

#3 It’s Very Stable

Just like an insurance policy, gold won’t make you rich but could certainly prevent you from being bankrupt. Unlike paper dollars, coins or other currency, gold has maintained its value throughout many decades and even centuries. Many people see gold as a way to pass on and preserve their wealth from one generation to the next, and rightly so.

Gold is often called the "crisis commodity," because people flee to hold it when world tensions rise. During these times, it often outperforms other investment options, like a worried stock market. But you don’t need to wait for a world-wide crisis to begin investing in gold. Gulfcoast Coin & Jewelry is your Southwest Florida gold location to begin your bullion or gold coin investment. Visit one of our stores in Cape Coral, Fort Myers, or Bonita Springs today and let us help you get started.

Seminar: How to Invest in Physical Precious Metals

Topics: Precious Metals, Investing, gold

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