Getting Started: Gold Investment for Millennials

Gold Investment for Millennials is More Important Than You May Think

Bullion.Directory Quick-Read Guides and Articles
By Alice Walker
Investor Relations Manager at Bullion.Directory

For some reason gold, typically, seems to be an asset class that’s filed under ‘old-fashioned’. But let me share something with you – as a millennial, gold could be your unexpected ally in building a robust and diverse portfolio. Let’s dive into why the glimmer of gold isn’t solely for your grandparents and can actually be a smart strategic move for your financial future too.

The Millennial Economic Landscape

First, let’s understand the terrain. If you’re a millennial (like me) you’ve had the economic equivalent of a tough workout. We came of age during the 2008 Great Recession, grappled with skyrocketing tuition costs, and now navigate an increasingly volatile job market in the wake of a pandemic.

No wonder avocados are the only luxury we can afford!

Despite these challenges, we’re not letting it knock us down. We’re the generation that can use a crisis as a springboard for action, and gold can be part of our action plan.

Historically, gold has been a reliable store of value and can serve as financial insurance against economic uncertainty.

Gold Investment for Millennials as an Inflation Hedge

Let’s chat about inflation. It’s the reason why your grandparents’ stories about buying a loaf of bread for a nickel seem like fairy tales compared to your $5 latte.

Over time, inflation can eat away at your hard-earned money – a risk that’s even more potent for millennials who have decades of inflation ahead of them.

This is where gold steps in. Gold is an excellent hedge against inflation. When the cost of living rises, so does the value of gold.

Let’s look back at the 1970s, a period of intense inflation. When the century-old link between the dollar and gold was removed with the end of the Gold Standard – unsurprisingly gold prices shot up – skyrocketing from around $35 an ounce to over $800 by 1980.

This correlation between high inflation and rising gold prices demonstrates how gold can protect your wealth from inflation’s damaging effects.

In truth it’s not gold’s value that’s rising, but the dollar’s buying power dropping.

Diversification with Gold

As you build your investment portfolio, diversification is key. This strategy is the equivalent of not putting all your eggs in one basket.

Sure, tech stocks may be the talk of the town among millennial investors but remember that they, like any asset class, are subject to market risks and volatility.

Enter gold. Gold moves independently of stocks and bonds, making it a perfect candidate for diversification, and in many cases actually has an inverse correlation with the stock market. Stocks drop, gold rises.

In 2008, when stocks were having a rough time, gold proved its mettle by not only holding its value, but reaching a then all-time high as the recession fully hit home.

If your portfolio had included gold, you would have been better off during this tumultuous period.

Gold’s Performance During Economic Downturns

OK so I’ve already mentioned 2008 twice (it seems to be the gold market’s go-to proof!) but again in 2020, amidst the global pandemic and a turbulent market, gold reached another new all-time high, underlining its reputation as a ‘safe haven’ asset.

When the world is looking shaky, when there are geopolitical and global financial risks people move towards buying gold. Is it any wonder given the financial landscape we are facing today that the wealthy and central banks are buying as much gold as they possibly can, while preparing for what’s to come?

It may not come today, tomorrow, next month or even next quarter – but come it will…

The Practicality of Gold IRAs for Millennials

So how can a millennial get started with gold investment, you may ask? A Gold IRA is an excellent place to start.

An Individual Retirement Account (IRA) allows you to save for retirement with tax-free growth or on a tax-deferred basis. With a Gold IRA, instead of paper assets, you are buying physical gold coins or bullion at an effective discount care of the IRS.

Time is on our side, fellow millennials. The longer your investment has to grow, the more you can benefit from compound interest – and gold is an extraordinary long-term investment averaging 8% year on year since the 70s.

Gold is a store of wealth – and making gold so tax-advantaged only boosts its attractiveness as an investment option.

Our recent Bullion Dealer of the Year public vote saw 5 companies named as the Best Gold IRA providers in America – and these would be a great place to start, thanks to the comprehensive information packs they provide, written in an easy to follow style and filled with actionable advice.

Buying Gold Online: A Modern Approach

As digital natives, we millennials can comfortably buy gold online. Websites like bullion.directory have simplified the process.

We provide consumer ratings and reviews for over 1600 online gold dealers, ensuring that you can buy gold from the comfort of your home without worrying about credibility.

To summarize, gold investment for millennials might seem unconventional. However, considering its performance in uncertain economic times, its hedge against inflation, and its role in portfolio diversification, it presents a compelling case.

Perhaps it’s time to add a bit of sparkle to your investment strategy with gold!

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