When it comes to making the most of an investment in gold, there is really one simple rule of thumb to follow: Buy as much as you can.
With a long-term view and long-term objectives, the more bullion you can acquire the better. Not only does this strategy on how to make the most of an investment in gold provide the most upside appreciation potential, but it comes with other potential benefits as well.
Simple math tells you that the more gold you have the more your investment will be worth if prices rise. To put this into perspective, here is a simple example:
Let’s say you bought $50,000 worth of gold in a single shot in order to add some diversity to your portfolio. At the time of your purchase, gold was worth $1200 per-ounce. Fast forward 20 years later, and with a gold price of $25,000 per-ounce, your investment would now be worth nearly $1,050,000.
Now assume for a moment that you bought more gold over a period of several years. Your total investment is $250,000 and your average purchase price was $1400 per-ounce. Fast forward 20 years and the price of gold is at $25,000. Your investment is now worth some $4,464,000.
With prices rising by nearly 25X over that time period, you would want to own as many ounces as possible, wouldn’t you?
A Dollar Hedge
It’s no secret that the dollar has been steadily losing value for decades. As with other fiat currencies, this trend is not likely to change.
A weaker dollar erodes your purchasing power. As the currency declines, each unit of currency buys fewer goods and services. This means that not only does disposable income decline, but net returns decline as well. Gold can provide an important hedge against such dollar weakness. As a dollar-denominated asset class, the gold market often moves inversely to the dollar. If the downtrend in the dollar continues, it stands to reason that it will push gold prices higher. This can potentially offset all or some of the negative effects of a weaker paper currency.
Central banks all over the world own massive amounts of gold. These holdings are used to add credibility to a nation’s currency and are also used to diversify central bank assets.
Gold has little correlation to stocks and bonds and can be an extremely powerful way to try to mitigate risks while potentially enhancing returns. If global central banks, the most powerful financial institutions on the planet, own gold, then shouldn’t you?
Adding this key asset class to your portfolio and making the most of your investment in gold has never been easier. Just pick up the phone and speak with an Advantage Gold account executive about all the potential benefits of gold ownership. Our associates are here to answer all your questions and can even show you how to maximize your gold investment using an IRA account.
Don’t wait for higher prices before acting. Explore your options for gold ownership today.