Though the general principle of retirement planning takes into consideration basic things like individual risk appetite and need for capital gain, there is one more thing we must consider – a hedge against downturns.
Diversifying investment and striking balance in returns are two of the most important things when determining your investment portfolio. If you wish to have strong performing portfolio for your retirement planning, investing in something that strikes this balance should be part of your plan.
Gold is a precious metal that can be both a good investment, and the balance you need in your retirement portfolio. Here’s how and why:
1. According to World Gold Council, in year 2017 Q3, global bar and coin demand shot up 17% y-o-y, reaching 222.3t (US$9.1bn).
The fact that the world’s gold refineries work day and night to keep up with the demand proves how much people still trust gold as a secure financial asset. Doesn’t this make gold a very safe and trustworthy investment?
2. Gold is a store of value and protection of wealth.
If you invest with Augmont Gold (Install link), you can ask for delivery at minimal delivery charges, and have the physical asset in form of coins and bars, unlike stocks.
As per VanEck gold and precious metals strategist Joe Foster, “Gold thrives on financial risk. When people look for a store of value, a currency hedge, a way to protect their wealth, they go to gold”.
3. For a retirement plan, you need to mitigate risk and have better control on your portfolio, by including gold bullion.
Among all your paper investments, gold bullion can be your safe-haven investment. Gold can be your hedge against financial dips.
Gold reduces volatility and risk by having an adverse correlation to all your other assets (gold prices are generally inversely proportional to that of paper assets); it creates a balanced portfolio performance.
4. As per reports from The Economic Times,
Gold has “more possibility of positive returns than other investments. Historical data shows that gold has given positive returns in 12 out of the last 15 years”.
5. According to the World Gold Council (WGC),
“Gold returns have not only been positive over various periods of time, but they’ve surpassed short-term bonds, a staple asset in some conventional retirement accounts.”
“Since April 2016, the average return on gold surpassed that of 3-month government bond returns by almost 8 percent”, says the WGC.
Overall, gold is a reliable area of investment for retirement plan as it gives you a wide range of portfolio options and the opportunity to diversify far beyond the limits of a conservative retirement portfolio.