Gold has historically been a good investment choice because, unlike currencies or other investments like stocks, it never devalues. And with upcoming price hikes for gas and food expected to raise prices on other commodities as well, $1,000 invested in an ounce of gold could earn $150-$400 more than $1,000 invested in stocks by 2024.
Plus, if something bad happens with our economy or society–such as another global recession or another 9/11-style event–gold is one of your best choices for protection against loss; over 90% of economists recommend maintaining at least 10% of your net worth in precious metals during times of economic turmoil (2018).
Understanding Inflation
Inflation occurs when a currency is losing value. This occurs, for example, when new money is printed to pay off a country’s debts. The more debt there is to pay off with new money, the faster inflation can occur. Inflation rates are measured by how much prices increase each year—for example 3% means that prices will rise by 3% per year on average and that each dollar you earn today will be worth less next year than it was before. It’s important to understand inflation because rising prices mean that your purchasing power decreases—so although you may have $1 today, it may only buy you $0.95 worth of goods next year or even a smaller amount depending on how much inflation there is.
How Does Gold Help Protect My Savings From Inflation?
Precious metals, such as gold and silver, are an effective way to hedge against inflation. The fact is that governments can’t keep printing more currency to cover their expenses; eventually, they run out of money—and if they don’t want to go into debt, they have no choice but to print less money. But by holding precious metals in your portfolio, you’re not just hedging against inflation; you’re also gaining from price appreciation.
Other Ways To Protect Your Portfolio From Inflation
Protecting your wealth from inflation is one of your main goals as an investor. However, that doesn’t mean you have to turn your hard-earned money into a piggy bank that produces no returns. In fact, one of the best ways to protect yourself against inflation is simply to buy assets that rise in value with it, rather than falling behind. Gold is an excellent way to do just that; you can even invest in gold through an exchange-traded fund (ETF) such as SPDR® Gold Shares (NYSE: GLD). That said, there are plenty of other investment vehicles you should explore—including real estate and gold stocks—to ensure you don’t get stuck losing purchasing power over time.
Conclusion
Based on experts’ predictions for inflation, America’s debt position, and global economy, it is projected that gold will be a safe bet from 2022 to 2028. Do your own research before investing in any precious metal though! I cannot stress enough how important it is to make sure you understand your investment and its risks as well as you can before putting down money. And never invest more than you can afford to lose.