Gold and Inflation: What Makes for a Good Investment

With inflation continuing to rise, more and more Americans are feeling the pinch in their pocketbooks. And with wages and salaries often not rising enough to cover those increased costs, Americans are desperate to make more money.

Perhaps that’s why so many investors have flocked to stock markets in recent months. Interest in stock trading from retail investors has been extraordinarily high recently, buoyed by stock prices that have just continued to rise. But with stock markets showing signs of plateauing, and with a greater amount of unease in financial markets, there’s a rising chance that many retail investors may learn the hard way that what goes up must come down.

It’s all well and good to try to add to your wealth by investing, but if you don’t have an investment strategy, it’s only too easy to lose money rather than make money. Throwing money willy-nilly into stocks, bonds, or other investments isn’t a strategy. And while we can certainly empathize with those looking to increase their wealth or better their position in life through investing, lacking a coherent investment strategy can be incredibly costly.

With that in mind, it’s worth looking at some of the characteristics that make up a good investment.

1. Durability

If you’re investing, and particularly if you’re investing with an eye toward building up retirement savings, you’re going to be investing for the long term. If you start investing in your 20s, you’ll have a 40-year investment horizon before you retire. And even after you retire, you’ll still hold investments of some sort. You could end up being an investor for 60-70 years or even more.

That’s why it’s important that your investment assets are durable and that they outlast you. You probably aren’t going to want to invest in the stocks of companies that might not be around 30-40 years from now. Nor will you want to buy those companies’ bonds. And while you could have made a killing buying pork and beef earlier this year and reselling it after meat prices spiked, meat isn’t a durable investment, it eventually just rots.

Contrary to some of these other assets, precious metals like gold and silver are among the most durable assets there are. Most of the gold ever mined throughout all of world history is still in existence above ground. Coins, bars, and jewelry thousands of years old still exist and look just as bright and shiny as they did when they were first made. That’s a testament to gold’s durability.

If you choose to invest in or own gold, it’s not just an asset that can help you, it’s an asset that can help your children or grandchildren. There’s very little else out there that can parallel that.

2. Stability

Stability is another important characteristic when it comes to evaluating assets. Many investors look at huge growth rates, like in cryptocurrencies, and their eyes light up with dollar signs. But assets that see astronomical growth very often see big declines too. Even stocks, which have generally increased in value over the past several decades, have periodic and severe bouts of instability.

Compare that to gold and silver, which trend upwards over time. For centuries, gold and silver were money. The very definitions of currencies such as the US dollar, the British pound, or the German mark were in weights of gold and silver.

Once those metals were replaced with paper currency, governments tried every trick in the book to try to suppress gold and silver prices, until President Nixon finally threw in the towel in 1971 and allowed gold prices to appreciate. From then on it’s been a long upward journey, but one that could have much further to go as gold and silver continue to rise in price.

3. Liquidity

It doesn’t do you any good to have an asset that is worth a lot that you can’t sell. Just ask the owners of mega-mansions that get listed for tens of millions of dollars and take years to sell. If you’re investing because you expect to need money in retirement, it doesn’t help you to own investments that are illiquid.

For many American households, their house is their largest investment asset. But it’s only something you can get money out of when you sell it, which leaves you looking for a place to live.

The number of potential assets you can invest in is nearly limitless, but that doesn’t mean that every asset is a good one, nor does it mean that every possible investment is equally liquid.

Stocks and bonds are among the most popular investments in the country. And for the most part the markets for them are incredibly liquid. But periodically, during economic crises and financial panics, markets can freeze. You may not be able to to find buyers for your assets when you want to sell. Or, thanks to government regulations, you may find that the fund you invest in is prohibited from selling its shares, in order to forestall a wider panic.

Here again is where investing in gold and silver can be advantageous. Precious metals markets run around the clock. Even when New York and London are closed, other markets around the world buy and sell gold and silver. And during times of panic is when gold and silver are particularly in demand as investors seek the safety of precious metals.

If the moment you happen to need to take a distribution from your retirement accounts happens to come in the midst of a market panic, which assets would you rather have to sell: stocks or gold?

Gold and Silver Investment Options

Aside from their durability, stability, and liquidity, gold and silver also have numerous purchase options to suit everyone.

Among the popular means of investing in gold and silver is a precious metals IRA. Whether a gold IRA or a silver IRA, these precious metals IRAs invest in physical gold or silver coins or bars while still enjoying all the same tax advantages as a conventional IRA. You can fund a precious metals IRA with existing assets from a 401(k), IRA, TSP, or similar account, making a precious metals IRA a popular option for those looking to protect retirement savings they have in existing tax-advantaged retirement accounts.

When you want to take a distribution from a precious metals IRA, you can take it either in cash or in physical precious metals. That allows you to continue benefiting from owning gold and silver even after you may have taken your required minimum distributions.

Of course, not everyone has retirement savings they want to protect. Nor do they necessarily want to deal with the hassle of rolling over or transferring funds from a 401(k) or IRA account into a precious metals IRA. This is where direct purchases of gold or silver come into play.

Buying gold and silver directly can be quick and easy, and you can have gold or silver coins on your doorstep in a matter of days. Once you feel the heft and solidity of a gold or silver coin, you understand why people for millennia have trusted precious metals as their primary source of wealth.

No matter which method of precious metals investment you choose, the experts at Goldco can help you through the process. From learning more about the benefits of gold and silver, to seeing the various coin and bar options you can choose from, to deciding where and how to store your precious metals, Goldco’s representatives can answer all of your questions.

With over a decade helping thousands of satisfied customers, Goldco’s precious metals experts are among the best in the industry. Give Goldco a call today and let our professionals help you learn more about protecting your retirement savings with gold and silver.


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