Investing in Gold: A Smart Long-Term Strategy?
Most people who might be considering gold bullion but have never owned it probably envision shiny yellow coins and bars tucked away in their safety deposit box or stashed somewhere safe in their home. As it turns out, gold bullion is one of the most stable assets on the planet and could be a highly profitable long-term strategy.
How has Gold Performed Over the Last Decade?
How much would your gold be worth today that you purchased ten years ago? For starters, it is important to remember that gold prices fluctuate daily. Over the course of time, and in this example, the past ten years, gold has seen a tremendous increase in value of 156%
(spot price today: $2950 – spot price 10 yrs ago: $1150 = 1800 / 1150 = 1.5652% X 100 = 156.52%)
As you can see, the price of gold has surged to $2,950 per ounce. When compound interest is excluded, this equals a 15.6% annual return. So, how does gold compare to other investments you may have, like stocks?
The Stock Market vs. Gold
In 1971, President Richard Nixon ended what was known as the “gold standard.” External market forces influenced the price of gold and, throughout the years, has seen periods of volatility and stagnation.
The benchmark for stock performance, the S&P 500, has grown roughly 175% during the past decade, a 17.5% annual return over the past 10 years. It is important to note that the annual return does not consider dividend yields.
Is Gold an Investment?
Gold bullion is not the type of asset that generates revenues or cash flow. Gold bullion is a tangible form of wealth that maintains intrinsic value over a period of time. While other investments may produce income, interest, and pay dividends, gold is a hedge against market uncertainty.
By some standards, it is considered the perfect form of wealth and the cornerstone of a sound portfolio. In times of geo-political unrest and economic uncertainty, global central banks fill their vaults and warehouses with gold to protect their country`s wealth and economic resources.
So, is gold an investment? Generally speaking, yes, but with multi-faceted benefits. If you purchased $100,000 in gold 10 years ago, you would have roughly $156,600 today if you sold it.
Gold in 2025 and Beyond
Gold is poised to eclipse $3,000 per ounce in 2025, with demand at the retail levels reaching unprecedented levels. With millions of investors worldwide entering the market for the first time, a rise well beyond this mark should be expected by the 3rd quarter.
Should I Invest in Gold?
If you are the type that believes in diversification, certified investment-grade gold and silver bullion is a time-tested strategy. There are a number of ways a portfolio can be diversified with gold and silver bullion. Here are some of the most popular:
- Direct Delivery: There are several companies that sell gold and silver bullion online that will deliver directly to your home. There are also companies that have call centers where you can speak directly with an agent who will walk you through the process.
- Precious Metals IRA: The Taxpayer Relief Act of 1997 allowed investors to include gold and silver bullion in their IRA. Later in 1998, it became possible also to include platinum and palladium coins. The program requires the metals to be stored in the custody of a bank, federally insured credit union, or entity approved by the IRS to act as a custodian or trustee.
Investing in Gold: A Smart Long-Term Strategy? The Risk
Like any investment, it is possible for the price of gold to go lower. Gold bullion is a long-term strategy. There are many different strategies for adding gold and silver bullion to your portfolio, and every situation is different.
If you want to buy gold bullion or silver bullion, call 888-611-0725 to speak with a professional.
