In today’s ever-fluctuating economic state, people are scrambling to find the perfect methods and investments to protect their money. Though a lot of the financially savvy may attest that investing in the stock market is the only way to go when in reality, there’s a standard that’s been upheld for much longer: the gold standard.
Well, gold and silver. During times of recession, or times of rising inflation, precious metals offer a steadfast path to secure wealth that is far less risky than other methods.
A Worthwhile Investment
If someone is looking to make an investment that has a strong return rate, then stocks are the way to go. However, if relief is the desired outcome, then opting for investing in gold and silver is definitively more worthwhile.
Gold is one of the few things of value that keeps its worth during times of economic strife- alongside famous masterpiece paintings and huge mansions. But what does that necessarily mean for those who own it?
The value of Gold is determined solely by its scarcity, as well as its reputation as a form of exchange- when the monetary value rises and falls, its gold and silver that holds steady.
Is It Time
As of now, the rate of inflation in the country is around 3.5x the Federal Reserve’s benchmark target rate (which is around 2%). In an attempt to decrease the chances of inflation, banks have consequently raised interest rates. As a result, the chances of borrowing money in the market plummeted.
What does this mean? Unfortunately- this means that investors are worried that the country’s chances of falling into a recession are starting to rise, making this a key point in time to put money into the precious metals market.
When looked at in the market, trends can be noticed that when the prices of stocks fall, the prices of Gold tend to inversely rise.
Means Of Buying Gold
As of now, there are three trustworthy ways to invest money in gold and silver, each tiering in levels of accessibility and buyer experience in the market.
Formally known as VanEck Gold Miners ETF, this is one of the most popular ways to own gold and other precious metals in the modern day. It’s low-risk and liquid, and because the security tracks the individual performances of multiple gold-mining companies- buyers can easily tell when the most opportune time to buy is.
One can also invest in gold and silver funds- known as junior or senior funds. These are gold-related ETFs (different from GDX).
Choosing to purchase junior funds involves a little bit more guesswork. These companies will track smaller companies that are less stable and more likely to fluctuate over time. For first-time investors, it’s likely that junior funds won’t be the ideal investment to make- but for long-time folks in the market, it may be advantageous.
Senior funds, on the other hand, are far more stable. These funds allow buyers to purchase from truly stable, consistent, gold-mining companies- taking the guesswork out of how lucrative they are.
Physical Gold and Silver
The last means of purchasing precious metals involves buying physical bars, jewelry, and other true gold and silver objects. This is by far the most accessible way of investing in the market, though it is not the most popular. It’s not a liquid investment compared to GDX and EFTs and selling it when the time comes may prove more difficult than just a push of a button.
It can also be easily stolen- causing precious metal owners to invest even more money in proper security means to prevent others claiming their wealth.