Gold's on pace for its best year since 1979
How should you buy gold? Broadly, you’ve got two choices...
Have you seen the price of gold?
It just blasted past $3,700/ounce. It’s up 40% so far this year.
As analyst Charlie Bilello pointed out, if it keeps this pace… it’ll be the best year for gold since 1979. Take a look:
At RiskHedge, we believe gold is a great investment as part of a larger portfolio. When mixed into a portfolio of stocks and bonds, gold works wonders to both reduce volatility and increase overall long-term returns.
Gold’s superpower is that its value is independent of any other factor.
Unlike stocks, gold doesn’t require the economy to keep humming or trade to keep freely flowing to rise in value.
Unlike government bonds, gold doesn’t require politicians to act with long-term prudence to hold its value.
And unlike the US dollar, which has lost 86% of its purchasing power in the last 50 years, gold has always appreciated over the long term.
Gold’s value is independent. It doesn’t require anyone to keep promises. It’s the only financial asset like this. The only possible exception is bitcoin (BTC), which we’ve covered in previous posts.
If you’re bored with the idea of gold, we get it. Gold doesn’t pay dividends or compound your wealth through earnings.
It won’t be disrupting anyone. But it’s also unlikely to ever be disrupted, a claim no company can make.
Buy some gold, forget about it, and get on with your life.
You don’t have to become a gold bug or cheer for the implosion of the financial system. You can own gold just in case. Chances are you’ll never need it. But if you do, you’ll be happy you have it.
Besides, there’s not much opportunity cost to owning gold as part of a larger portfolio. An allocation of 5%–10% in gold smoothes out your portfolio returns.
How should you buy gold? Broadly, you’ve got two choices:
Gold ETFs like the SPDR Gold Trust (GLD) are “paper” gold. They track the gold price. They’re better than nothing. But when you own GLD, you don’t own any metal. If you’re trading in and out of gold, that’s fine. But if you’re holding long term as part of a balanced portfolio, why not own the real thing?
Plus, paper gold doesn’t always show up when you need it most. In 2008, some gold ETFs halted redemptions.
Physical gold is always the #1 choice. The kind you can hold in your hand and that can’t be hacked, frozen, or obfuscated by third parties. Just a timeless asset that’s held its value for 2,000+ years.