by Demarco Gonzalez | April 25, 2017 3:04 pm
Gold investing has been a trending topic since the final months of last year. This is the first time since the recession that gold trading has reached new highs. Gold buying is traditionally a forte of serious investors and older people saving for retirement. Millennials, however, are also entering the investment market.
Millennials are told to start saving in younger years and to make investments with long-term goals like retirement in mind. If that’s the case, is it wise for millennials to invest in gold? With the rising interest in gold buying, millennials are also looking toward this precious metal as a potential way to secure future finances. Let’s look at whether gold could ever be a good investment for millennials.
The appeal of gold is rather simple. The precious metal is valued inversely proportional to the value of the dollar. When the value of the dollar goes up, gold prices plummet. And the opposite is true as well. Therein lies the main appeal of gold. The value of the dollar plunges during highly uncertain financial times, like during a recession. Experienced investors know that precious metals like gold are the only solution to prevent a loss in case of a devaluation of cash assets.
Gold, in this sense, is not an investment. You do not buy gold to increase your wealth the same way as investing in stock. Gold is a hedge for cash assets. Investors use gold to protect cash investments in a situation where the dollar declines. The recent Brexit debacle in Britain is a great example of a currency plunge. As the value of the pound plummeted following the vote, many investors, especially retirement savers, saw value being shaved off cash assets. Those who had gold, however, protected overall assets as gold prices soared in relation to the pound’s declining values. Millennials who want to buy gold must understand that gold is a hedge as explained here, not an investment.
Millennials with long-term cash investments should definitely buy gold to protect wealth in case of a scenario like the recession of 2008 or the recent Brexit vote. Keep in mind that it’s the physical gold that matters, not stock investments in gold companies. Millennials can buy gold coins, bullion, and bars from reputable dealers like Lear Capital. If desired, national mint gold coins can be added to an IRA.
Gold may not be a good investment, but it is a must needed hedge for millennials who invest in cash assets.
Source URL: https://betacash.org/should-millennials-invest-in-gold/
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