Why Portfolios of Seniors Should Include Gold Now

Investing in gold has always been encouraged, with the metal’s recent performance only adding to its appeal. By mid-February, the precious metal’s value had hit $1,990 an ounce, moving to $2,160 an ounce by March. By late April, the price of gold was just below $2,400 an ounce. This significant increase in the metal’s price has been attributed to different factors, among them geopolitical tensions, rising inflation and other economic uncertainties.

For individuals in retirement, investing in gold may be appealing, particularly since it’s a good way to maximize one’s returns. Below, we look at other factors that make gold a good investment option for seniors.

Diversifying a portfolio

Portfolio diversification is critical for ensuring long-term stability financially and mitigating risk, particularly during retirement as sources of income are limited.

Gold is also a good diversifier, because of its low correlation with other classes of assets such as bonds and stocks. Adding this precious metal to one’s portfolio decreases overall risk exposure while also potentially improving returns.

Liquidity

Gold can easily be sold and bought on the international market, which makes it highly liquid. This is advantageous, especially for seniors who may need access to their investments on short notice either for unexpected medical expenses or other emergencies.

Safe-haven asset

During times of geopolitical turmoil or economic uncertainty, this precious metal’s appeal as a safe-haven asset grows. This is because investors flock to it as a reliable store of value, which increases its price. For older individuals, gold’s characteristic as a safe-haven asset can offer a sense of security.

Rising inflation

Inflation has led to an increase in the cost of living. This may negatively affect older individuals on fixed incomes, who may notice a decline in their purchasing power. Historically, gold has been used as a hedge against inflation because it retains its value while the dollar’s value diminishes because of rising prices. Purchasing gold assets now can allow seniors to preserve the value of their portfolios.

Physical ownership benefits

Physically holding gold in the form of bars, coins or jewelry is a good way to hold onto a tangible asset that can be passed down to younger generations. Holding a physical asset such as gold can provide a sense of reassurance to seniors, while also allowing them to control their investments.

Provides capital appreciation potential

Gold has shown its potential for capital appreciation, particularly over the long-term. This may provide older individuals the opportunity for growth within their investment portfolios.

For additional exposure to gold, it may be worthwhile to select a number of gold stocks such as Royal Gold Inc. (NASDAQ: RGLD) and assess whether these stocks meet the criteria for investing before adding them to one’s portfolio.

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