Introducing bullion into your portfolio can be a smart way to inject some much-needed diversification into your investments. Alternative assets like bullion can help you preserve your wealth in a volatile marketplace, protecting it in from the fluctuations of stock markets and the relentless effect of inflation on your cash savings.
Recent news from the London Bullion Market Association shows the London gold price benchmark hitting an all-time high, surpassing the previous high set in late 2023. Silver prices have been climbing, too, and analysts believe that the rise is the result of several factors, including expectations that U.S. interest rates will fall in the near future. Lower U.S. interest rates will mean lower returns on competing assets like bonds, and they’ll make gold more affordable to buyers using foreign currencies. These tips can help you integrate bullion into your portfolio in a way that maximizes profits and minimizes risks.
How to Take Advantage of Rising Gold Prices in Your Portfolio?
1. Buy Physical Bullion
Buying physical bullion can set you up for success from the start. When you buy bullion yourself, you’re not stuck paying fees to a fund manager, and you enjoy direct control over your asset.
Where should you go to buy bullion? Bullion dealers like Global Bullion Suppliers do an excellent job of explaining where the price you pay comes from. Typically, you can expect to pay the spot price of gold or silver, which is based on global markets, as well as a premium. Find a dealer who explains their premiums and makes it clear how much you’re paying so that you can factor those costs into your investments.
2. Find a Home Storage Solution
Many bullion investors prefer to store their bullion in a safe at home rather than in a safety deposit box or relying on services where you never actually see or touch your bullion.
The main reason is that investors want to know that they have control over their assets. Bullion has the unique quality of acting as a commodity that’s actually practical to store on your own, and taking advantage of that quality can give you an extra layer of security.
Fears about losing gold stored off-site are far from unfounded. There are always stories coming out, like a recent one from Richmond, B.C., where a vault storage company that defaulted on their rent took the bullion contents of two safety deposit box renters.
While the renters have been allowed to sue, most investors don’t want to even entertain the possibility of this kind of theft happening. Invest in a vault and an insurance policy, and make sure you store bullion safely and out of direct sunlight.
3. Set Your Goals for When to Sell
One of the toughest parts of successfully investing in bullion is knowing when to sell. It can help if you have the answer to that question before you invest.
Gold and silver work well for long-term investing. They can act as hedges against inflation and stock market volatility and provide a counterweight to cash and stock investments.
Final Thoughts
Leaning into those qualities generally means holding bullion for long periods of time, potentially even with the goal of passing it down to future generations or waiting for moments like recessions or historically high prices to make your move.
Bullion can play an important role in anyone’s portfolio. Make sure you have a plan for adding this new investment, and you can take advantage of rising prices.
