By Matt Richardson, CBS News
Those investors hoping for a straight path down from decades-high inflation have been disappointed this year after two consecutive reports showed inflation higher than the Federal Reserve's 2% target goal. With inflation currently at 3.1%, there's still work left to do, and interest rates are likely to remain high until that work is completed.
Against this backdrop, many investors have looked to boost their savings and diversify their portfolios. Accordingly, gold investing hit an 11-year high last fall. Unlike some other assets, gold is a valuable way to hedge against inflation and offset losses felt elsewhere.
Are you considering the precious metal? Below we'll detail three critical gold moves all investors should make now.
3 critical gold moves all investors should make now
Here are three critical gold moves all investors should make now.
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It may seem self-evident but the first and most important gold investing move is to simply get invested in the precious metal. While inflation has come down significantly from its recent high in June 2022, it's still elevated, with no clear insight into when it will come down further.
With this understanding, investors would benefit from promptly getting invested in the metal. Thanks to its ability to hedge against inflation (gold often maintains its value and even rises during such periods), many would benefit from devoting a portion of their portfolio to gold now, especially when measured against other, volatile investments like stocks and bonds.
Don't overinvest
While it may be tempting to fully protect your portfolio in today's inflationary environment, it's important not to overinvest in any asset class, including gold. For the metal to be truly valuable, then, investors should limit the gold portion of their portfolio to 10% or less.
Depending on the investors' profile, that range could be higher or lower but should generally not exceed the 10% threshold. By maintaining this equilibrium investors won't suffocate the potential of their other investments while still offering them the unique security that only gold can provide.
Research all options
Gold comes in many investment forms, ranging from simple to advanced. Beginner investors, then, should research all their options to make sure they're getting started with the right type. Gold IRAs, gold ETFs, gold stocks and gold futures come with unique pros and cons but they won't all be advantageous for every investor.
Take the time, then, to understand what they can and can't do. And know what you expect in advance. By doing these calculations now you'll better improve your chances of a successful gold investment, regardless of the type.
The bottom line
Gold is a unique investment and in today's inflationary, high-rate climate that may be exactly what many investors need. To bolster the benefits of an investment in the precious metal investors should simply get started, as every day without gold in your portfolio is another day in which it could unnecessarily suffer from inflation.
But investors should be careful not to overinvest, either, as a more balanced approach is likely to produce a more fruitful outcome. Finally, investors should research all their gold options to find the one best suited to their unique financial circumstances. By making these three critical gold moves now investors can immediately see some short-term benefits while positioning themselves (and their portfolios) for long-term financial success.
