With the everything bubble on the brink of exploding, here are the top 15 reasons why investors are adding physical gold to their retirement accounts in 2024.
1. Gold as a hedge against inflation:
Inflation is the rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling. When inflation is high, every dollar you own buys less than it did before. This means that if you do not take steps to protect your wealth, it can be eroded over time. This is why investors need a hedge against inflation.
While some investors look towards stocks, real estate or bonds as a hedge against inflation. We recommend investing in gold as a hedge against inflation. One of the main reasons to own gold is as a hedge against inflation. As the price of goods and services increases over time, the value of fiat currencies (like the US dollar) decreases. Gold, on the other hand, has historically maintained its purchasing power over long periods of time. This makes it a valuable asset to hold as a hedge against inflation.
Investors need a hedge against inflation to protect their wealth from being eroded over time. There are several ways to achieve this, such as investing in gold, real estate, stocks and bonds. Each of these assets has the potential to increase in value as inflation rises, providing a counterbalance to the erosion of wealth. It’s important to note that it’s not necessary to invest only in one of these assets but diversifying across them will provide a better hedge.
2. Diversification:
Diversification is an important strategy for investors because it helps to spread out risk and reduce dependence on any one particular asset class. By diversifying your investment portfolio, you can protect your wealth in case of a market downturn and increase the chances of earning a positive return on your investments.
Diversification is also important because it helps to reduce the impact of volatility on your portfolio. Volatility is the degree of variation of a financial instrument over time. Different assets have different levels of volatility. By diversifying your portfolio, you can reduce the overall volatility of your investments and minimize the potential for large losses.
Diversification can also help to take advantage of different market conditions. Different assets perform well under different market conditions. By diversifying your portfolio, you can take advantage of different market conditions and potentially earn higher returns. It’s important to note that diversification does not guarantee a profit or protect against loss. However, it can help to reduce overall portfolio risk and increase the chances of earning a positive return.
Another reason to own gold is for diversification purposes. By including gold in your investment portfolio, you can spread out your risk and reduce your dependence on any one particular asset class. This can help to protect your wealth in case of a market downturn.
3. Gold’s store of value:
Gold has been used as a store of value for thousands of years. It is durable, easily transportable, and universally recognized. This makes it an ideal asset to hold for long-term wealth preservation.
Gold is still considered one of the most effective ways for investors to preserve their wealth today. The metal’s unique properties, such as its durability, scarcity, and universal recognition, make it an ideal asset to hold for long-term wealth preservation.
One of the main benefits of using gold as a store of value is that it has the ability to maintain its purchasing power over long periods of time. Unlike fiat currencies, which are subject to inflation and can lose value over time, gold has historically maintained its purchasing power. This makes it a valuable asset to hold as a hedge against inflation and a way to preserve wealth.
Another advantage of using gold as a store of value is its liquidity. Gold is a highly liquid asset, which means it can be easily bought and sold. This makes it a convenient option for those who may need to access their funds quickly. In addition, gold is universally recognized, making it easy to trade or sell regardless of location.
Gold also has a low correlation to other assets, such as stocks and bonds. This means that when the stock market goes down, the price of gold may not necessarily follow. As a result, owning gold can help to diversify your investment portfolio and reduce risk. It can also act as a safe haven asset during times of political and economic uncertainty, as it tends to perform well during times of crisis.
4. Political and economic uncertainty:
In times of political and economic uncertainty, gold can be a safe haven asset. It tends to perform well during times of crisis, such as war, natural disasters, and political upheaval. As global political and economic conditions can be difficult to predict, owning gold can provide a measure of security.
Gold has been considered a safe haven asset for centuries, and for good reason. During times of political and economic uncertainty, gold can provide a measure of security for investors as its value tends to increase in such scenarios.
One of the main reasons gold is a good investment during political and economic uncertainty is that it has a low correlation to other assets, such as stocks and bonds. When the stock market goes down or the economy is struggling, the price of gold may not necessarily follow. This can provide a buffer for investors who are looking to protect their wealth during tough times.
Another reason gold is a good investment during times of uncertainty is that it has a long history of maintaining its value. Gold has been used as a store of value for thousands of years and has proven to be a reliable asset during times of crisis, such as war, natural disasters, and political upheaval.
In addition, gold is a highly liquid asset, which means it can be easily bought and sold. This makes it a convenient option for those who may need to access their funds quickly. It also has the potential for capital appreciation as demand for gold increases, so can its price. This can also help to protect your wealth and provide the potential for growth.
5. Gold has a low correlation to other assets:
Gold has a low correlation to other assets, such as stocks and bonds. This means that when the stock market goes down or the economy is struggling, the price of gold may not necessarily follow. This can provide a buffer for investors who are looking to diversify their portfolio and reduce risk.
One of the main reasons for gold’s low correlation to other assets is that it is not tied to any specific currency or stock market. The price of gold is determined by supply and demand, as well as geopolitical events and economic conditions. This means that the performance of gold is not directly tied to the performance of any one particular market or economy.
Another reason for gold’s low correlation is that it is often used as a safe haven asset during times of market downturns or economic uncertainty. When investors are worried about the economy or the stock market, they often flock to safe haven assets like gold, which can drive up its price. This is why it has been observed that gold tends to perform well during times of crisis and economic downturns, when other assets may be struggling.
Having low correlation to other assets can be beneficial for investors as it allows them to diversify their portfolio and spread out risk. This way, if one asset class performs poorly, the other assets in the portfolio can help to offset the losses. This can help to protect the overall value of an investor’s portfolio during market downturns.
6. Gold is Liquid:
Gold is considered a highly liquid asset, which means it can be easily bought and sold. This makes it a convenient option for investors who may need to access their funds quickly. The ease of buying and selling gold is one of the main reasons it is an attractive investment option for many investors.
Another way gold is liquid is through its physical form, such as coins and bars. Physical gold can be stored in a safe deposit box or at a professional bullion storage facility. This makes it easy for investors to buy, sell and store their gold. It is also universally recognized, making it easy to trade or sell regardless of location.
Additionally, the gold market is also very large and active, with a constant flow of buyers and sellers. This means that it is easy for investors to find a buyer or seller for their gold at any given time. This allows for a great degree of flexibility for investors, who can easily enter or exit the market as needed.
7. Gold’s potential for capital appreciation:
Gold has the potential for capital appreciation, which means that its value can increase over time. This is one of the reasons why it is considered an attractive investment option for many investors.
One of the main reasons for gold’s potential for capital appreciation is its limited supply. Gold is a finite resource, and the amount of gold that can be mined is limited. This means that as demand for gold increases, the price of gold may also increase. Factors such as political and economic uncertainty, inflation, and currency fluctuations can all contribute to an increase in demand for gold, which in turn can drive up its price.
Another reason for gold’s potential for capital appreciation is its use in various industries. Gold is used in various industries such as jewelry, technology, and healthcare. The increased demand for these industries can also contribute to an increase in the price of gold.
Gold also has the potential for capital appreciation as safe haven asset during times of market downturns or economic uncertainty. When investors are worried about the economy or the stock market, they often flock to safe haven assets like gold, which can drive up its price.
8. Gold is a hedge against currency fluctuations:
Gold is often considered a hedge against currency fluctuations, which means that it can protect investors from the risks associated with changes in the value of fiat currencies. This is one of the reasons why gold is considered an attractive investment option for many investors.
One of the main reasons gold is considered a hedge against currency fluctuations is that it has a long history of maintaining its value. Unlike fiat currencies, which are subject to inflation and can lose value over time, gold has historically maintained its purchasing power. This makes it a valuable asset to hold as a hedge against inflation and a way to preserve wealth.
Another reason gold is considered a hedge against currency fluctuations is that it is not tied to any specific currency. The price of gold is determined by supply and demand, as well as geopolitical events and economic conditions. This means that the performance of gold is not directly tied to the performance of any one particular currency.
9. Gold is a hedge against stock market volatility:
old can provide a hedge against stock market volatility, which means it can protect investors from the risks associated with sudden changes in the value of stocks. This is one of the reasons why gold is considered an attractive investment option for many investors.
One of the main reasons gold can provide a hedge against stock market volatility is that it has a low correlation to other assets, such as stocks and bonds. This means that when the stock market goes down, the price of gold may not necessarily follow. This can provide a buffer for investors who are looking to protect their wealth during tough times.
Another reason gold can provide a hedge against stock market volatility is that it is often considered a safe haven asset during times of market downturns or economic uncertainty. When investors are worried about the economy or the stock market, they often flock to safe haven assets like gold, which can drive up its price. This is why it has been observed that gold tends to perform well during times of crisis and economic downturns, when other assets may be struggling.
10. Gold is a hedge against geopolitical risks:
Hedging against geopolitical risks can help protect an investment portfolio from the impact of unexpected events such as war, political instability, and natural disasters. These events can have a significant impact on global markets, and can cause stocks, bonds, and other assets to decline in value. By hedging against geopolitical risks, investors can reduce the potential for losses and protect their wealth.
One of the main reasons to hedge against geopolitical risks is that these events can be difficult to predict. Political instability, for example, can arise suddenly and have a severe impact on markets and economies. By hedging against these risks, investors can reduce the potential for losses, even if the event occurs.
Another reason to hedge against geopolitical risks is that they can lead to currency fluctuations. Political instability and other geopolitical events can cause currencies to depreciate, which can lead to a decline in the value of assets held in that currency. By hedging against these risks, investors can reduce the potential for losses caused by currency fluctuations.
Gold can be a safe haven asset during times of geopolitical risk, such as war or political upheaval. As such, owning gold can provide a measure of protection against these types of risks.
11. Gold has tax advantages:
The tax advantages of owning gold depend on the jurisdiction and the type of gold that is owned. In general, gold is taxed differently from other investments such as stocks, bonds, and real estate.
In the United States, for example, gold bullion is considered a collectible by the Internal Revenue Service (IRS) and is subject to a 28% capital gains tax if held for less than a year, and a long-term capital gains tax rate of 20% if held for more than a year. Gold coins, on the other hand, are considered currency by the IRS, and are taxed at the same rate as other forms of currency.
In addition, physical gold can be held in a self-directed individual retirement account (IRA) or a self-directed 401(k) plan. These types of accounts provide tax-deferred or tax-free growth potential, which can help to reduce the overall tax burden on the investment.
Another advantage of owning gold is that it can be stored outside of the jurisdiction in which the owner resides, which can provide additional tax benefits. For example, if an investor stores gold in a tax-free country, it may not be subject to any taxes.
However, it is important to note that tax laws and regulations can vary by jurisdiction and can change over time, so it’s important to consult with a tax advisor or financial professional to understand the specific tax advantages and implications of owning gold.
12. Gold is easily accessible:
Gold is considered a highly liquid asset, which means it is easily accessible for investors. There are several ways in which gold can be bought and sold, making it a convenient option for those looking to invest in the precious metal. Gold can be easily bought and sold, and is available in various forms such as coins and bars.
Physical gold can be stored in a safe deposit box or at a professional bullion storage facility, and can be bought and sold through dealers like American Bullion.
13. Gold is durable:
Gold is a durable metal, which means it can withstand wear and tear over time. It is a chemical element with the symbol Au, which is a soft, dense, yellow metal. It is a good conductor of heat and electricity, and is not affected by air or water corrosion.
Gold is a durable and long-lasting asset. It does not corrode or tarnish, making it a suitable option for long-term investment. Gold is also a very malleable metal, which means it can be easily shaped and formed. This makes it a popular choice for jewelry and other decorative items. It is also used in various industrial applications, such as electronic devices and medical equipment, due to its corrosion resistance and high conductivity.
Gold is also a very durable store of value, it has been used as a medium of exchange and store of value for thousands of years. It’s known for its preservation of wealth and purchasing power in the long term.
14: Gold is universally recognized:
Gold is recognized and accepted as a form of payment worldwide, making it an easy asset to trade or sell. Gold is considered to be universally recognized as a valuable and precious metal. Its value is recognized globally and has been used as a medium of exchange and store of value for thousands of years.
Gold has been used as a store of value and currency for centuries in various cultures and civilizations. It is widely accepted as a medium of exchange by banks, governments and financial institutions. This is why it is often considered as a safe haven asset and a store of value in times of economic and financial uncertainty.
Gold is also widely used in the jewelry industry, which makes it a valuable commodity worldwide. It is a popular choice for wedding and engagement rings, bracelets, necklaces, and other types of jewelry.
Additionally, gold is also recognized and accepted as an investment option by many countries and is traded on various global stock markets. It is also recognized as a currency and is traded on various global commodity markets.
It’s important to note that the recognition and acceptance of gold may vary depending on the jurisdiction and specific laws and regulations. It’s always good to consult with a financial advisor or a tax advisor for personalized advice on the recognition and acceptance of gold in a specific jurisdiction.
15: Gold is not subject to government manipulation:
Unlike fiat currencies, gold is not subject to government manipulation. This makes it a reliable asset that can help to preserve wealth during times of economic instability. Gold, as a physical commodity, is not subject to the same level of government manipulation as other financial assets such as stocks and bonds. Governments can manipulate the value of these assets by manipulating interest rates, currency values, and other financial tools. However, gold is a finite physical resource, and its value is primarily determined by supply and demand in the market.
Additionally, gold is a decentralized market, with no central point of control. This makes it difficult for any one government or group to manipulate the price of gold. The market for gold is global, and it is traded on various stock and commodity exchanges around the world. This decentralization helps to ensure that the price of gold reflects the true supply and demand for the metal.
It’s important to note that while gold is less susceptible to government manipulation than other financial assets, it’s always good to keep an eye on the economic and political factors that may affect the gold market
In conclusion, owning gold in 2024 can be a smart investment decision for several reasons. It can act as a hedge against inflation, provide diversification, and serve as a store of value. Gold can be a safe haven asset during times of political and economic uncertainty, and it has low correlation to other assets. It is a highly liquid asset and also has the potential for capital appreciation. These factors make gold a valuable addition to any investment portfolio.
If you would like to know more about how to add gold to your IRA or 401, please contact American Bullion at 1-800-GOLD-IRA to speak with one of our friendly gold specialists.