5 Reasons Why You Should Invest in Gold For Retirement
If you want to best ensure your financial health stays in tip top shape throughout your long awaited retirement, gold is the perfect investment to include as part of your portfolio. A finite rarity the world craves, investing in gold bullion is straightforward and offers a way to store wealth securely over the longer term.
You'll find many well-respected investment pundits and financial advisors always recommend gold be included in every retirement fund. Here's five reasons why:
1. Low risk bullion market is straightforward
There are many different ways to invest in gold, but the simplest and least speculative of them is to directly invest in gold bullion. Using a retirement fund to do this is straightforward. You simply need to contact your accountant and instruct them to open for you a self-managed superannuation fund (SMSF). It's a simple and easy process. More and more Australians are weighing up the options and choosing to take this proactive approach when it comes to managing their future wealth, so they can enjoy a more prosperous retirement.
2. Preserve your current wealth in traditional 'safe haven'
Your retirement fund is supposed to safely accumulate, preserving hard-earned capital until you retire, so that you can remain comfortable during your days of leisure. The great majority of advisors urge clients to build a balanced portfolio of investments, containing everything from a few risky, high-return stocks to property, low-risk Blue Chips and assets such as cash and precious metals, including gold. While gold is traditionally thought of as the oldest form of money, the yellow metal, unlike currency, cannot simply be printed, therefore it can't be debased. When you choose to store your long term wealth in gold, you are choosing an asset which historically holds value securely. Gold, the price of which always rockets during times of major economic uncertainly, has also proven itself to be a good hedge against deflation, stagflation , disinflation and hyperinflation.
3. Historical performance
In 2001, an ounce of gold would have set you back US$271. A decade later, it cost US$1,896 – a near 700 percent rise. While the gold price has taken a breather in recent months, what's certain is that it performs extremely well in times of economic turbulence, such as the global financial crisis (GFC) beginning 2007. “Honoured through the ages, the standard of wealth, the original money, the safe haven,” Matthew Hart wrote recently in Vanity Fair of gold. He referred to the metal's stellar performance amid the economic crises caused by the GFC. “The gold price fed on these calamities....it was the re-discovered idol at a time when other gods were falling in a heap of subprime mortgages and credit default swaps and derivative products too complicated too even understand. Against these, gold shone with the placed certainty of received tradition.” Remember, that whilst the gold price can be volatile in the short term, history tells us it is able to maintain its value over the longer term.
4. Gold is a finite rarity
The world craves gold. Less and less of it is being discovered and mined the world over. The globe's biggest producer, South Africa, saw output of the yellow metal more than halve during the last decade. Meanwhile, the total amount of gold “above -ground” is increasing only by a paltry 1.6% per year. The asset is a finite resource, which gives further weight to the notion that its value over the long term is assured and that it is the perfect investment for your retirement.
5. Gold assists diversification
Many Australians are becoming increasingly concerned that superannuation portfolios they hold are too greatly focused on shares. Following GFC in particular, when many assets formerly thought to be secure were shown not to be, concern amongst holders of superannuation funds understandably rose sharply. Investment theory tells us that precious metals such as gold are likely to provide low or negative correlation to other asset classes, such as stocks and bonds. Gold will thus help you balance your superannuation portfolio, reducing both volatility and risk.