Name three things people buy but hope they never have to use. The first two are easy … insurance … and life jackets. But would you believe the third one is gold?
The Bible often mentions the precious value of gold— but what place should it have in your portfolio?
Things to know about using gold as "insurance":
- Gold is really like insurance because people buy it in case there’s a currency or stock market collapse.
- Gold tends to rise when the US dollar falls— but if the market takes a nosedive— it’s not always the case that gold rises.
- Gold is another asset class that provides further diversification once your portfolio is large enough.
- Gold should be a small part of your portfolio - for most people only 5%... 10% max.
Some things to keep in mind about gold:
- See gold more as an investment but remember it leaves a lot to be desired mainly because of the volatility.
- Gold is prone to huge spikes and collapses, as well as long periods of time when the price doesn’t move much at all.
- There are some less-than-reputable outfits selling gold— but what they’re really selling is fear. That’s not a good mindset for making wise financial decisions.
- Gold dealers often try to sell products like collectible coins that cost more than intrinsic value of the metal. Always ask for the "melt value".
- Get an independent appraisal of a gold product because the seller’s appraisal might be higher than it should be.
- There is a thing such as "paper gold" but some worry whether it will hold up during economic crisis.
- If you plan to buy the physical form of gold, remember you may need additional insurance, a safe deposit box or other offsite secure storage which will incur extra ongoing expense.
Next, Rob and Steve tackle listener questions at 800-525-7000 and via email to Questions@MoneyWiseLive.org on a variety of topics:
- Is buying silver a good way to invest?
- If you've put money into a "tax advantaged" account, how do you know how to invest those funds and be sure they're properly diversified?
- Is buying a prepaid funeral a good idea?
- What if your friend is a faithful Christian but does not tithe at all?
- If you're unexpectedly retired and, as the last of a long family line you have lot of gold, silver and diamond-platinum, where can you go for a reputable place to sell it?
- If you're a single parent of an autistic daughter and want your wishes for quality long term care to be carried out, how do you start setting up a financial planning for that?
- If you have a 13 year old, is it too late to start a 529 College Plan?
- If you're currently on a limited income, confident in the retirement amount in your service pension but have 4 years to get there, should you use an IRS 72T rule to pull from your 401(k) or take from the principal of your Roth to live on in the interim?
- How do you find reputable dealers to sell your gold to?
Be sure to check out our new website at MoneyWiseLive.org to connect with a MoneyWise Coach or access our books, videos, or any of our free helpful resources. Thanks for your prayerful and financial support that helps keep MoneyWise Live on the air. And if you'd like to help, just click the Donate tab at the top of the page.