Not sure if you should own gold? Gold has long been a popular asset for those who are looking to avoid risk. Gold is a safe haven to which investors turn when they’re scared off by other aspects of the market.
Who Buys Gold?
The average gold buyer is a far cry from the gold bugs you see on TV. For the most part, gold buyers are professionals with a variety of incomes who are looking for low-risk assets as part of their retirement savings. Gold is an effective vehicle for preserving wealth in the face of inflation, market risks, and currency debasement. When you absolutely can’t afford to lose your investment, buy gold bullion.
High Net Worth Investors
When you think of high net worth investors, you may think of Warren Buffet, who has less-than-flattering things to say about gold. Buffet remains firmly in the camp that says the stock market is always the best investment, as it always recovers. But Buffet was born in 1930 and belongs to a generation of optimists who have been coddled by an economy that always has recovered and grown bigger and bigger. That’s a reality few countries enjoy, and one that America may see become a thing of the past.
Look no further than where the new wealth in Asia wants to invest, or where the old-rich aristocratic families of Europe put so much of their money. These families invest heavily in gold bullion because they need wealth insurance. Their fortunes are made to last generations and they don’t have the same kind of naïve faith in endless economic growth that Americans have grown used to.
Events like the 1997 Asian financial crisis and European bank failures and bail-outs of the last decade have shaken that faith that the economy will always grow. American investors of all incomes are putting more money into gold bullion because they see a weakened foundation to the economy in their day-to-day lives. High net worth investors had better follow suit if they want to hold onto their wealth.
When Should You Buy Gold?
The best time to buy gold is when you need it. Predicting gold prices is notoriously difficult. Gold prices are influenced by so many factors, including temperamental investor sentiment, that it’s hard to get right. When it comes to timing gold prices, there are only two reliable rules you should follow:
- a) Buy gold when you need to balance out a high-risk portfolio. The price-point you’re hoping for may never appear.
- b) The second rule is a caveat to the first rule: buy gold when it’s quiet. Even if you feel like you need to add gold during a gold price boomsuch as the one that culminated in 2012, you could be setting yourself up for failure by buying at soon-to-crash prices.
You should always get more info about gold prices before you buy.
Gold is the asset for you if you’re worried about uncertainty, don’t want to risk your hard-earned savings gambling on the stock market, and want to save long-term for your future. Buy gold when you want to keep your money safe.