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3 times beginners should invest in gold (and 2 times they shouldn’t)
As a beginner investor, you may have heard that it’s wise to invest in gold. And that’s for good reason. Gold has a storied history as a safe investment asset and currency alternative that consumers, corporations and governments alike have leaned on throughout history.
While gold has a meaningful home in most investment portfolios, it’s not necessarily the perfect asset for everyone at all times. And, determining when (and when not to) invest in gold can be difficult, especially for beginners.
So, when should beginner investors invest in gold, and when shouldn’t they? That’s what we will break down below.
Learn more about your gold investing options today.
3 times beginners should invest in gold (and 2 times they shouldn’t)
Here’s when it makes sense for beginners to invest in gold (and when it may be beneficial to consider alternative investments).
3 times beginners should invest in gold
Here are three times beginner investors should consider investing in gold:
When they need to diversify their portfolios
It’s not usually a good idea to invest your entire portfolio’s value into a single asset or a group of like assets. For example, you shouldn’t invest 100% of your portfolio’s value into a single stock or group of stocks. Instead, it’s typically best to diversify your portfolio. That means you should spread your investment dollars over a wide range of asset classes and individual investments within those classes.
As you diversify, it’s important to consider how some assets will provide support for others.
That’s where gold comes in. The price of gold tends to rise when traditional investments – like stocks and bonds – fall in value. So, by using gold to diversify your portfolio, you may be able to offset losses when one or more of your traditional investments falls in value.
Diversify your investment portfolio with gold now.
When inflation is a cause for concern
Gold is a longstanding inflation hedge. That’s because gold’s price tends to rise alongside the prices of consumer goods and services during inflationary periods. So, while other assets in your portfolio may suffer from inflation-related losses, inflation-related gains in gold could help balance those potential losses out.
When other market risks are present
There are several market risks to consider as you invest. Some of which are more timely today than usual. For example, election years, like this year, can lead to a change in leadership in the United States. That change in leadership could mean differences in corporate taxes, trade agreements and a wide range of other factors that play a role in corporations’ ability to produce profits. As such, election years can come with market uncertainty.
Other risks are important to consider as well. For example, geopolitical uncertainty and Federal Reserve monetary policy decisions can have an impact on the stock market, too.
But, when market concerns are high, investors tend to look to gold as a safe haven investment. That means they buy gold as a way to protect their portfolios during times of uncertainty. That can push the price of gold up, producing profits for those who hold it. So, any time market risks are present is typically a good time to invest in gold.
2 times when beginners shouldn’t invest in gold
Though there are times when beginners should invest in gold, there are other times when they should stay away from the commodity. Here are two times when beginners shouldn’t invest in the yellow metal:
When inflation is minimal
Gold’s price and inflation rates tend to go hand in hand. So, when inflation is minimal, gains in the price of gold will usually be minimal too. Therefore, beginners should generally steer clear of gold when inflation is low as other assets may produce better returns.
When their portfolio is too small for a safe gold allocation
It’s important to limit your gold holdings to 10% or less of your total portfolio assets. And, with today’s gold price being $2,318.60 per ounce, that price can be cost prohibitive. That’s especially true for beginner investors with relatively small portfolios. In fact, if your total portfolio value is under $23,186.00 a single ounce of gold would push your allocation over the 10% threshold.
However, it’s worth mentioning that fractional gold may be a way to overcome this issue. You could buy gold in quantities as small as one-tenth of an ounce with some dealers but you may have to pay a higher per-ounce price to do so.
The bottom line
Gold is an impressive asset for beginner investors to consider. But, there are times to, and not to, buy the precious metal. In particular, beginners should consider buying gold when they need to diversify their portfolios, when inflation rates are high and when other market risks are present. But, they should consider avoiding gold when inflation is minimal or their portfolios are too small to make a safe investment in the precious metal (one that represents 10% or less of their total holdings). Nonetheless, inflation is high and market risks are ever present. So, there’s a high probability that gold has a meaningful place in your portfolio right now.
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RNC committee approves Trump-influenced 2024 GOP platform with softened abortion language
The Republican National Committee’s 2024 platform, approved by its platform committee and released Monday, is influenced heavily by presumptive presidential nominee and former President Donald Trump, and in a change from prior years, it backs the rights of states to make their own abortion laws.
The 2016 RNC platform mentioned the word “abortion” 35 times and backed a constitutional amendment to ban abortion: “[W]e assert the sanctity of human life and affirm that the unborn child has a fundamental right to life which cannot be infringed,” the RNC’s 2016 platform said. “We support a human life amendment to the Constitution and legislation to make clear that the Fourteenth Amendment’s protections apply to children before birth.”
The Republican Party did not release a platform in 2020. And the 2024 platform only mentions the word once.
“We proudly stand for families and life,” the 2024 platform says. “We believe that the 14th Amendment to the Constitution of the United States guarantees that no person can be denied life or liberty without due process,” but it goes on to say, “the states are, therefore, free to pass laws protecting those rights.”
The platform has been initially approved by the RNC committee, but is expected to go to a full vote Tuesday and be officially approved the first day of the Republican National Convention next week.
It also goes on to express opposition to late-term abortion and support for “policies that advance prenatal care, access to birth control, and IVF (fertility treatments).”
Ralph Reed, founder and chairman of the Faith and Freedom coalition, previously expressed concerns about removing abortion language, but he appeared to fall in line and back the GOP platform as released.
“The Republican Party platform makes clear the unborn child has a right to life that is protected by the Constitution under the due process clause of the 14th Amendment,” Reed said in a statement. “That language has been in the GOP platform for 40 years and reflects the view of Ronald Reagan. While aspirational, it applies to both the states and the federal government. The proposed ban on late-term abortion also implies federal as well as state action. It is an unapologetically pro-life position, and we are grateful to President Trump and the Republican Party for standing for life.”
RNC Chairman Michael Whatley and Co-chair Lara Trump focused on the economy and the border in their statement on the platform.
“Only President Trump can restore our economy, restore our southern border, and restore America’s standing in the world,” the two RNC leaders said in a joint statement. “His 2024 Republican Party Platform is a bold roadmap that will undo the devastating damage that Joe Biden’s far-left policies have done to this country, power President Trump to a historic victory in November, and Make America Great Again.”
The platform is titled, “2024 GOP Platform: Make America Great Again!” It bears clear signs of the former president’s influence, emphasizing enforcing border security and stopping the “migrant crime epidemic.” The platform includes a goal to carry out “the largest deportation operation in American history.”
The platform also proposes building a “great iron dome missile defense shield over our entire country.”
Trump and his campaign have also adopted a new proposal in recent months — eliminating taxes on tips. Trump mentions it frequently at rallies, and it appears in the RNC 2024 platform, along with a promise to end inflation, which has been easing.
The GOP also states in the platform that there will be no cuts to Social Security or Medicare and no changes to the retirement age. It also says that the push for electric vehicles should be canceled and regulations should be cut. And it calls for “same day voting, voter identification, paper ballots, and proof of citizenship” as means to “secure our elections.”
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