It’s never too early to start planning for your retirement. In fact, the sooner you can get your money working for you the better. Ideally, by the time you are ready to retire, you will have a number of investments that are generating enough income for you to live comfortably.
It’s important to have a diversified retirement portfolio. Doing so will help to ensure that your investments can weather the storm of economic uncertainty, should the economy become unstable. Savvy investors have used gold as a diversification tool for many years with very positive results.
The U.S. Gold Bureau has helped to educate people planning for their retirements on the benefits of gold investing for many years. There are a wide variety of gold investment strategies available. Some might be better than others depending on your goals. Rest assured there is a gold investment perfectly suited to your investment needs.
What Should be Included in Your Retirement Portfolio?
Building a strong retirement portfolio is about finding a balance between your risk tolerance, timeline, and goals. The last thing you want to do is outlive your investments. You should also consider how social security and pensions might play a role in your investment strategies.
There are different kinds of retirement portfolios that are designed with different strategies in mind. Odds are, you’ll be using a few different strategies throughout the course of saving for your retirement.
A growth portfolio is designed to increase the value of your portfolio by investing in companies with a better-than-average rate of growth. These stocks tend to have low dividend payouts or none at all.
Keep in mind that you are counting on these stocks to appreciate in value over time. Growth stocks might be better suited for younger investors than people who are on the verge of retirement.
An income portfolio is a portfolio that consists of dividends, capital gains, and interest-paying assets like stocks and ETFs. Income portfolios also contain stocks that are expected to increase in value over time. So, in a way, income portfolios do contain some of the characteristics of a growth portfolio.
Building a Balanced Portfolio
A balanced portfolio will contain both growth and income investments. It will also contain investments meant to help with diversification. Market conditions will dictate which investment strategy you should be concentrating on. Unfortunately, investing for your retirement isn’t a set-it-and-and-forget-it endeavor.
Should I Include Precious Metals in My Retirement Portfolio?
Precious metals — specifically gold — have been used as a way to diversify investment portfolios for many years.
Gold has a negative correlation to the dollar. During times of inflation — when the price of goods and services go up — gold has a tendency to go with it. Investing in gold can be a great way of preserving wealth or making money during times of economic turmoil.
Gold isn’t just a good hedge against inflation, it is also a great way to hedge against stock market volatility. Because gold has a negative correlation to the stock market, it makes an excellent hedge for when the market becomes turbulent.
Types of Gold Investment
There are many great ways to invest in gold. Some are direct and some are indirect. Let’s take a look at some of the ways you can invest in gold for your retirement.
Gold IRAs allow account holders to invest in precious metals. They can actually purchase the physical gold, or they can invest in gold-related stocks, mining companies, and ETFs without having to store the precious metals.
Gold IRA account holders can also invest in real estate, businesses, and other assets.
Gold exchange-traded funds, or ETFs for short, are bundled gold-related stocks. The ETF might be comprised of mining company stocks as well as stocks that track the price of gold. Not all that glitters is gold, however. Make sure to do your research before purchasing a gold ETF.
Mining Company Stock
Owning physical gold means having to either invest in a safe or pay a third party to store it. Purchasing stock in mining companies is an indirect way of investing in gold without having to have the physical gold on hand.
The downside is that over the long haul, physical gold usually outperforms mining company stocks. Plus, there is something to be said for the peace of mind that comes with knowing you are in possession of your physical gold.
How Much Cash Should You Keep in Your Retirement Portfolio?
There is no definitive answer to this. It depends on your risk tolerance and your investment strategy. It also depends on what that money is allocated for.
Experts recommend having anywhere from six months to one year’s worth of cash on hand in case of emergencies. This has nothing to do with the amount of “dry powder” to have on hand when investment opportunities present themselves.
U.S. Gold Bureau
We specialize in educating the public about investing in gold. We have been doing so for 23 years. There has never been a better time than now to get started on your gold investment journey.
If you would like to learn more or are already interested in taking the next step toward owning gold, contact us for your free consultation.