Over the last few years, equities investors appear to have gotten a little too comfortable.
Historically low volatility on stock markets lulled many into a false sense of security that their investments would just go up, up, and up.
It was a great ride, but February 2018 proved to be a rude wake-up call for many investors. Pundits feared the time had come when sudden volatility rocked the Dow Jones and S&P 500 in February.
#1 The Crash
The crash hasn’t struck, but volatility appears to have gone back to normal. In the first two months of 2018, the S&P 500 moved by 1% or more 35% of the time. That kind of volatility is normal for the markets and it means markets are going to be more vulnerable to the news cycle and quicker to jump at signs of market weakness.
While things have essentially gone back to normal on the market, the more important story is remarkable because of how quiet it is: gold volatility is dramatically down. As equities have been up and down for weeks, gold has shown an unusual stability, proving its role as a hedge against markets.
#2 Why Use Gold
Gold is increasingly used in investment portfolios as a way to bet against markets and the U.S. dollar, not to mention hedge against inflation. It’s seen as a conservative counter-investment that will hold its value when markets perform poorly, making up for losses in other parts of your portfolio as investors flee toward a safe bet like gold.
Gold’s recent performance in the face of renewed market volatility is a vindication for investors who increasingly see gold as a mainstream part of a portfolio designed to manage risk as well as grow.
It’s important to note that gold bullion remains the lowest risk and most stable form of gold investment. There is little to no third-party risk in gold bullion that’s not stored at a bank (and therefore susceptible to future bank bail-ins).
As a remedy to the risks of bank storage, gold bullion providers like Silver Gold Bull have begun offering investors insured allocated storage to protect their gold coins and bars. ETFs and gold company stocks still come with plenty of third-party risks, so many investors are using the physical thing to keep risks under control.
#3 Buying Physical Gold
When you want physical gold bullion, you can buy gold coins or gold bars from companies like Silver Gold Bull. They sell and deliver gold coins and gold bars produced by both private refiners and government mints.
The Canadian Gold Maple Leaf and American Gold Eagle are among the most popular gold coins in the world, as well as Gold Krugerrands, Perth Mint gold coins, and Austrian Philharmonics. Instead of investing in paper gold, you can buy the real thing from Silver Gold Bull at a competitive rate.
When you’re buying gold bullion, always be careful with premiums. There are gold coins out there with collectors’ value as well. Do your research when you’re buying gold coins.
Gold has become a low-volatility investment that can protect your wealth from an unpredictable stock market. If you want to bolster your portfolio’s resistance to loss, buy more gold.
Are thinking about buying gold bullion to keeps your savings safe?
Leave a Reply