While most investors have both eyes glued to the stock market, some are opting to put their money in a more durable form. Maxwell Loeb, a financial planner at Westchester Benefit Group Inc., says investments in precious metals like gold and silver can be a huge help during unexpected downturns.
“Gold, silver, and other precious metals can be a valuable addition to an investor’s portfolio,” says Loeb. “Precious metals are seen as ‘countercyclical,’ which essentially means that they have a tendency to perform poorly in good markets and perform well in bad markets. If the market were to have a correction, precious metals might be the portion of a retiree’s portfolio to grab cash from while they wait it out for other investments to recover.”
“Gold, silver, and other precious metals can be a valuable addition to an investor’s portfolio.”
However, this doesn’t mean investors should be dumping every penny into gold nuggets. According to Loeb, unlike many investments, the price of gold and silver are “strongly correlated to the supply and demand of each element.”
Loeb recommends those who want to start investing in precious metals open up a brokerage account and buy into one of many different ETFs [exchange traded funds] or mutual funds available. “There is a range of different types of funds,” says Loeb. “Some tied directly to the element while others are invested in companies in the industry.”