Or is it? Below are four solid reasons why you should strongly consider adding gold to your portfolio.
1. Increasing Inflation
Typically, investors see inflation as a bad sign for the economy. All of the value of their stocks go right down the drain as wealth, across the board, begins to lose its value.
Historically though, gold has been seen as a valuable commodity during times of inflation, as people begin to look for something more stable and with more of a history to rely upon. And under President Trump, inflation seems to be on the rise, which means gold prices should see a significant boost as well.
2. Government Debt
As with inflation, during times of economic crisis, investors tend to look towards those assets that hold their value through the troubles, despite what happens in the intermediary periods. One of those darlings is precious metals, or more specifically, gold.
United States debt has always been less than stellar, but recently, the Congressional Budget Office expects to see the deficit increase from $1 trillion this year to nearly $1.2 trillion every year over the next decade. Paying off the interest on the debt alone will most likely outpace military spending alone by the year 2023, according to some analysts.
As mentioned before, savvy investors will turn to a more stable asset during these times, which means you should see the price of gold rise accordingly with the national debt.
3. Decreasing Supply
Economics 101 teaches that as the supply of something decreases and the demand for it grows, the value will increase as well. This is precisely what is happening with gold.
Because the price of gold has taken a downturn as of late, the companies that traditionally mine for gold have scaled back their operations, which creates a limited supply of gold while the demand continues to increase. If it goes up dramatically, you could see the price of gold skyrocket. It’s best to get in on that boom now before the price of gold becomes almost unreasonable.
4. Cheap Stocks
Things that hold their value over time are traditionally good buys whenever their value tends to be marked down, as is the case of gold right now. More specifically, gold mining stocks are almost at an all-time low, which makes them very appealing to investors with an eye to the future and recognizes a good deal when they see one. If you want to invest in an asset that almost always sees a bounce back from low prices, gold mining stocks are your buy.