If you’re looking to diversify your investment portfolio, investing in gold may be an attractive option. There are several benefits to owning gold, including the potential for compound interest and a low cost of entry. As an added bonus, you can also avoid the high costs of physical gold and can buy and sell your gold securities at any time.
Gold has historically attracted investors and has long been an attractive choice. Its low correlation to other assets makes it an excellent volatility hedge. As a result, you should be able to get a steady return, irrespective of the broader market or economic outlook. Buying gold now may provide you with a higher return, but you should always consider the risk of inflation before investing.
Aside from physical gold, you can also invest in exchange-traded funds, which are great alternative investments. This way, you can diversify your investment portfolio without the high costs of owning physical gold. Furthermore, you can enjoy the fast-paced environment of the futures market without the need to deal with margin requirements. Some of the largest gold ETFs are SPDR Gold Shares (GLD), iShares Gold Trust (IAU), and Aberdeen Standard Physical Gold Shares ETF (AGS).
In addition to buying physical gold, you can also purchase gold mining stocks. However, unlike physical gold, these stocks do not move in tandem with the price of gold. Their success or failure is entirely dependent on the performance of the mining company and how it deploys capital and profits. Gold mining stocks are useful as a portfolio diversification strategy, but they do not provide the security of physical gold. Physical gold is still the most effective way of protecting your portfolio.