CBS News
Why gold is a key asset in recession-proof portfolios
Getty Images
Investors have jumped at gold investments in recent years. So much so, in fact, that the price of the precious metal has hit record highs several times since the start of 2024.
It’s no wonder why investors are flocking to gold, either. In times of high inflation and economic uncertainty, gold can be a smart way to safeguard your wealth. When timed right, it can also be a wise tool to recession-proof your portfolio.
Add gold to your investment portfolio today.
Why gold is a key asset in recession-proof portfolios
Are you looking for a way to prepare for a potential recession? Here’s why experts say gold can be a good idea.
Gold’s price grows when worries do
Gold has long been considered a protector against inflation and a safeguard of wealth, so when consumers start to worry about the economy, interest in gold grows.
“Historically, gold has been seen as a hedge against economic instability, inflation, or a declining currency,” says Matthew Argyle, a certified financial planner and owner of Encore Retirement Planning. “Put another way, gold is like economic disaster insurance.”
Because of this, gold investing not only gets more popular during hard economic times and recessions, but that demand drives up prices, too.
“Gold will be volatile in a recession at the onset but will rebound first once the fear and margin calls subside,” says Michael Chadwick, president of Fiscal Wisdom Wealth Management. “Once past that, gold will do well for an extended period, and the worse the recession is and the more inflation there is, the better it’ll do.”
In fact, James Cordier, CEO and head trader at Alternative Options, says gold prices could reach over $3,000 next year — up from the $2,600 the price hovers near today.
“We see the long-term underlining fundamentals as extremely bullish,” Cordier says. “The investors seeking alternative assets next year, could be all the catalyst needed to reach that level.”
Learn about your gold investing options here.
History repeats itself
The proof is in the pudding, as they say, and historically, gold has performed well in past recessions.
“During the recession of 1973 to 1975, gold surged 87%, in the recession of 1980-1982 gold had a modest increase of 1.6%, but in 1983 it grew 20%,” says Eric Elkins, CEO of Double E Financial Solutions. “During the Covid-19 recession from January to August 2020, gold rose by 28%. Based on this historical picture, gold has been a consistent overachiever during recessions.”
“We have almost a perfect recipe” for gold right now, Chadwick says. “It’s more compelling than anytime in recent history.”
It diversifies your portfolio
Gold is also a good portfolio diversifier. It tends to not follow the same trajectory as other asset classes, so when you’re seeing a downturn in one area — like the stock market, for instance — gold often gains ground. This allows you to offset those losses and reduce your overall risk.
“The stock market has won overall, but there were marked periods where gold was the clear winner,” Argyle says. “These were enormous economic events, and the outperformance lasted for years — the great depression, the stagflation of the 1970s, and the tech bubble and later financial crisis of the first decade of the 2000s.”
The bottom line
Gold can be a good way to recession-proof your portfolio, but exactly how much should you buy — and in what way? While “everyone’s appetite for risk is different,” Elkins says. “We typically like allocating initially somewhere b/w 5% to 20% toward gold or other precious metals if expecting or in a recession.”
As for how to do it, Argyle suggests gold ETFs or mutual funds, as they allow you to retain liquidity. Gold individual retirement accounts (IRAs) are also a good option.
With these approaches, “you don’t have to worry about the troubling aspects of gold ownership: reselling coins, high broker fees, transportation, storage, and insurance to cover disaster or theft,” he says.
Watch CBS News
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.
McDonald’s Quarter Pounder hamburgers have been linked to an outbreak of E. coli, a bacteria that can make people sick.
The outbreak has killed one person in Colorado, according to the U.S. Centers for Disease Control and Prevention. It has also affected nearly 50 other people in 10 states.
The illnesses may be linked to slivered onions used on Quarter Pounders or the patty itself, but the investigation into the specific contaminated food ingredient is ongoing, the CDC shared in a post Tuesday.
McDonald’s said it has removed Quarter Pounders from a total of 12 states, but that all other menu items are unaffected.
The CDC added the outbreak may not be limited to the states with known illnesses, either.
“The true number of sick people is likely much higher than the number reported. This is because many people recover without medical care and are not tested for E. coli,” the agency wrote.
Symptoms and early signs of E. coli
E. coli symptoms usually start about two to seven days after exposure, CBS News chief medical correspondent Dr. Jon LaPook said on the “CBS Evening News” Tuesday.
Symptoms can include:
- Diarrhea
- Fever
- Abdominal cramping
- Vomiting
- Feeling dehydrated or dizzy
If you ate a Quarter Pounder and have any of these symptoms, contact your health care provider, the CDC advises.
“Especially if you have fever over 102, you can’t keep liquids down or your symptoms are lasting more than three days,” LaPook said.
How E. coli is transmitted
People can get infected with E. coli by ingesting it.
“This can happen through contaminated food or water or contact with animals, environments, or other people,” the CDC’s website notes.
The best way to prevent infection is by keeping your hands clean, preparing food safely and drinking safe water, the agency adds.
How severe can E. coli get
“Most E. coli are harmless and are part of a healthy intestinal tract. E. coli help us digest food, produce vitamins, and protect us from harmful germs. But some E. coli can make people sick with diarrhea, urinary tract infections, pneumonia, sepsis, and other illnesses,” the CDC says.
For example, certain E. coli infections can lead to a serious health condition called hemolytic uremic syndrome, or HUS, which can cause kidney failure, permanent health problems and death, according to the CDC.
Certain people are also at increased risk for E. coli infection, including:
- Children under 5
- Adults 65 and older
- People with weakened immune systems
- International travelers
CBS News
South Carolina man admits killing neighbor, allegedly made funeral pamphlet with victim’s name: “RIP Oscar”
A former police officer in South Carolina has pleaded guilty to killing his neighbor after investigators found a trove of physical evidence tying him to the crime, including bloodstained clothing and a funeral pamphlet in his home with “RIP Oscar” and “you should love your neighbor” written on it, authorities said.
Justin Rawlins Moody, 43, was sentenced to 34 years in prison Monday after pleading guilty to murder shortly before his trial was set to begin in Greenwood County, Solicitor David Stumbo said in a statement.
The girlfriend of 48-year-old Oscar Rubio found him dead in his Ware Shoals home in May 2023, shot in the head and in the chest, deputies said.
Neighbors told officers who responded to the shooting that Rubio and Moody had recently been arguing and said Moody borrowed money from his neighbor in the past. Moody refused to come out of his home for deputies until one he knew arrived.
When Moody spoke to investigators he said he didn’t kill Rubio, but knew an extraordinary amount of information about what happened, Stumbo said.
Officers then asked him how he knew so much and Moody “claimed to be God and could hear the thoughts of other people,” Stumbo said.
8th Circuit Solicitor’s Office of South Carolina
Deputies found the gun used to kill Rubio in Moody’s bedroom, blood spattered on pants hanging on a kitchen chair, boots in Moody’s home that matched a distinct footprint in blood at the victim’s house, thousand of dollars in cash belonging to Rubio and keys to his vehicle — as well as the funeral pamphlet with “RIP Oscar” and “you should love your neighbor” written on it, prosecutors said.
Under South Carolina law, a murder sentence must be within the range of 30 years to life in prison and served day-for-day, meaning Moody will not be eligible for parole, officials said.
“This is an absolutely senseless act of violence,” Stumbo said in a statement. “I cannot say enough about the excellent work done by the law enforcement investigators and our prosecutors to put Justin Moody behind bars for essentially the rest of his life.”
Moody worked as a law enforcement officer for at least six different South Carolina agencies starting in 2006, according to records from the South Carolina Criminal Justice Academy.
He worked for four years in Laurens County, a year in Greenville County and nearly three years in Richland County during two stints before appearing to leave law enforcement for good in October 2018, according to his records.
None of the agencies reported that Moody was fired or said he shouldn’t be hired anywhere else, the records show, although one agency was upset that he left after less than five months and took a job with another agency.