Today’s Inflation Levels Make Gold a Smart Investment ChoiceJohnathan Douglas
Since the November election, gold prices have soared. At the end of February, the price had crept to just over $1,250 per ounce, the highest it had been since Election Day. It could be argued that there’s never been a better time to invest in gold than now: The new administration has big plans for stimulating the US economy, and as a result, gold is expected to rise, increasing the value of your investment accounts.
The Current Administration and Inflation
The current administration has been advocating an agenda to bring back American jobs; the results of those efforts could push the cost of producing goods much higher. Economic experts say, however, that this sort of economic stimulus might cause rising inflation late in an economic cycle, and while it may postpone any sudden economic downturn, when that downturn does happen, it may be more severe.
Some experts disagree and say economic growth can occur gradually, at a comfortable pace, without inflation going up too much, especially since during the last administration, there were years of little to no inflation. Inflation has been holding under 2 percent for the fifth year in a row. Regardless of what inflation does, though, gold historically holds its own and trends upward given enough time, as do the other precious metals. Whether you’re looking to cash in on potential positive movement in the economy or you want to protect your retirement with a stable foundation, gold and silver investments help you achieve those goals.
Gold versus the Stock Market
In February 2017, the Dow Jones Industrial Average came in at over 20,000 points, an elusive height that sent valuations and trade activity soaring. With the stock market performing so strongly, investors often migrate toward riskier investments with the potential for fast wealth growth. Common wisdom seems to say to dump precious metals for stocks and bonds in boom times, but that wisdom doesn’t account for the big picture. First, you can invest in precious metal stocks and bonds to diversify your portfolio; you can also rely on gold-backed IRAs for long-term savings and asset growth. Another reason not to forgo precious metals completely as stocks heat up is that perpetual upward movement isn’t likely in most markets, but gold does trend upwards through the years for investors with enough patience.
Now is a great time to invest in precious metals. Whether or not the new administration’s policies support robust economic growth or the Dow Jones stays at peak levels, gold tends to react in a stable manner to all environments. Including gold in your portfolio allows you to confidently make a few investment risks, knowing that your gold IRA or other investment will continue to perform.