You Need Gold to Increase Your Net Worth

You Need Gold to Increase Your Net Worth

September 18, 2019 0 By Edward H. Howard

Few assets help you reliably build your net worth the way gold can. If you’re looking to make a quick buck on the stock market, you’re as likely to lose as earn gains. For real wealth-building, you need a strategy that involves slow growth. There will always be a place for high-growth investments in your portfolio, and they should even make up the majority of your investments, but gold is all about long-term leverage.

There are two primary reasons to buy precious metals:

  • Insurance for your existing investments
  • Long-term price gains

Gold as Insurance

Most investors, whether they’re high net worth or just saving for retirement, keep their money in a mix of stocks and bonds. Gold buyers rely on the reverse relationship between gold prices and stock prices as a kind of insurance policy. When stocks depreciate in value, commodities like precious metals go up, and that gives them the breathing room to buy into the recovery. Otherwise, your net worth will go up and down with the market without ever breaking ahead.

Long-Term Gold Growth

Gold is what’s called an inflation hedge. It keeps its value better than cash, which is constantly losing out to inflation. Whether it’s one, two, five, or ten percent a year, inflation (the growing price of goods and services) is constantly eating away at your savings. A gold bar in a safe may not produce the dividends that stocks do, but it’s better at keeping its worth than currency.

Learn How to Buy Gold

To get into this market, find an online gold seller with the coins, bars, and rounds you want, at a good price point. You can use features such as price alerts offered by Silver Gold Bull and other sellers to receive an instant notification when spot prices hit the mark you’re waiting for.

Buy Gold with Dollar Cost Averaging

Many prospective investors hold back because they’re waiting for the right time. Unfortunately, even experts don’t know how to read the market. Instead, consider using Dollar Cost Averaging to increase your gold position.

Dollar-Cost Averaging, or DCA, is a smart strategy for building wealth over time, as it accounts for price volatility. If you’ve ever bought a stock one day only to see its price point dip shortly after, you understand the frustration of not being able to time the market to your advantage. DCA takes out the guesswork – and the regrets.

You invest a fixed dollar amount on a fixed schedule, rather than make a lump sum investment. In a market where you can’t predict prices, the logic is that volatility will essentially cancel itself out. Your well-timed moves will make up for those that are not.

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Gold on a Rising Trend

DCA can backfire when an asset goes on a consistent upward trend, in which case it would be better to front-load your purchase. Some analysts believe that’s where gold is headed. A recent price breakout has analysts revising their expectations for year-end performance and there are early murmurs of a new gold bull market, though it’s truly too early to tell.

Wherever gold prices go, you can invest confidently knowing that it will protect and increase your net worth. You can rely on hard assets like the yellow metal for long-term value in a portfolio, far more than stocks in most companies.