Should you buy gold / silver?
Curtis has earned the Life and Health Insurance licensure, has passed the Series 66 examination, and has earned a degree from the University of Nevada, Reno. He has over 20 years of experience in the financial industry, helping others protect, grow and manage their wealth. Curtis helps clients create customized strategies for their portfolios based on their unique financial goals.
SHOULD YOU BUY GOLD / SILVER?
A common question that we, as advisors, have been receiving from clients and prospective clients in recent months is “should I buy gold or silver?” With the Federal Government spending during the COVID-19 pandemic, our national debt is nearing 30 trillion dollars and people are concerned about inflation and the value of the dollar.
When you look at the previous sentence, what is the emotion that comes to mind when you read that? I would argue that the emotion that comes to the forefront is that of fear. Gold and other precious metals trade on fear. When we are scared, we look to get our hands on a tangible asset such as gold, and we sure do start to see a lot of TV commercials talking about gold and other precious metals when things start to feel a bit scary.
In my opinion, gold and other precious metals are not a bad thing to have in your possession, it is good to have some of this as a very small part of your overall portfolio. The one thing that is important is that you hold something that is tangible and that has value. You can buy all sorts of funds that are tied to precious metals like gold, but I would argue that if you want to hold precious metals you should hold the physical asset. This can be found in various forms from ingots, ounces, and coins. I feel that you should not create your own personal Fort Knox and have gold bars lining the safe of your house as things are good in moderation so having a small allocation of the physical asset should be sufficient.
Remember precious metals can be very volatile, meaning they can gain and lose value very quickly. Also, remember that gold and silver are not the easiest things to buy and sell in the everyday world. I don’t know of anyone who has gone to the gas station or the grocery store and used gold or silver to reconcile the amount owed. I am sure there are examples of transactions that have occurred, but historically we have not used gold or silver to transact business in modern history.
In conclusion, I believe that holding some physical gold and silver isn’t a bad thing, but you need to have a real conversation with yourself and your family on if you do decide to go that route, why you are going that way. Odds are you will not use this in day-to-day life, and I would argue if the economy collapses (which I don’t believe it is) having gold and silver in excess is not a ticket to being able to navigate unscathed through something like that happening. I feel there would be much bigger things to worry about. Usually, physical gold and silver will be passed down to the next generation as part of an inheritance or as heirlooms. Remember, if you do decide to get some precious metals in physical form, keep them safe! Use a safe or a safe deposit box at your bank to ensure their safety.
If you are looking to add gold, or silver to your portfolio here are some important things to keep in mind when you are weighing what the best option may be for you before making that investment.
Based in Reno, NV, Cornerstone is for individuals and families looking to grow wealth, protect and preserve their life savings, and plan for the distribution of their estate in a tax-efficient manner through a tailored strategy. Schedule a time to discuss your financial goals with us.