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6 simple, low-risk ways to diversify your investment portfolio this July
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In today’s volatile economic environment, having the wrong asset mix in your investment portfolio can lead to significant losses. After all, everything from market fluctuations to geopolitical tensions, high inflation and other economic uncertainties can drive down the value of your portfolio if you aren’t using the right asset mix to offset risk.
A well-diversified portfolio, on the other hand, is prepared to weather most types of economic storms. That’s because, by diversifying your assets, you mitigate the risk by spreading your money across various classes, sectors and geographies. That way, when certain investments are performing poorly, the other assets in your portfolio can compensate for the losses.
While that may sound complicated, there are a few simple ways to diversify your portfolio. Below, we’ll detail what you should know about the simple, low-risk options you have for doing that this July.
Find out how gold investing could be the right solution for you.
6 simple, low-risk ways to diversify your investment portfolio this July
Here are the options you may want to consider if portfolio diversification is a priority right now:
Invest in 1-ounce gold bars
Investing in 1-ounce gold bars is a straightforward way to add gold to your portfolio. These assets offer the potential for long-term appreciation and are one of the most affordable gold bullion options available. And, owning physical gold can provide a sense of security to investors due to its tangible nature.
These smaller gold bars are also small enough to be stored in a home safe or bank safety deposit box, cutting down the associated storage costs. And, because of the lower price point, 1-ounce gold bars can be easily liquidated when necessary, especially if they were produced by a well-known mint.
- What to consider: When purchasing physical gold, ensure you buy from reputable dealers to avoid counterfeit products. You should also factor in the extra insurance costs that come with owning physical gold when making a decision. And, be sure to factor in the premium over the spot price of gold, which can affect your overall returns.
Explore the many benefits of adding gold to your investment portfolio.
Consider fractional gold
For those looking to start smaller or maintain more flexibility, fractional gold options could be worth considering. One big benefit of fractional gold is that it allows you to gradually build your gold holdings without committing to full ounces, making it more accessible for a range of budgets. There’s typically also greater flexibility in terms of selling these small gold coins. After all, because these smaller gold investments are more affordable, there’s a wider pool of potential buyers, which comes in handy if you need to liquidate some of your holdings.
- What to consider: While fractional gold offers more flexibility, be aware that the higher premiums can eat into your overall returns. So, be sure to calculate the cost per ounce to ensure you’re getting a fair deal.
Buy gold mining stocks
Investing in stocks for gold mining companies lets you gain exposure to the gold market with the potential for higher returns and dividends — and without the hassle of holding physical gold bars or coins. By buying these stocks, you have the opportunity to benefit from company growth and efficiency improvements, and if you time it right, your gold stocks can potentially outperform the returns on physical gold.
However, gold mining stocks can be more volatile than physical gold, as they’re subject to company-specific risks as well as gold price fluctuations. So, before you use this gold investing option for diversification purposes, be sure to consider factors such as management quality, operational efficiency and the geopolitical risks associated with mining locations.
- What to consider: Look for well-established mining companies with strong balance sheets and a history of efficient operations. And, consider diversifying across multiple mining stocks to mitigate any company-specific risks.
Opt for gold ETFs
Gold exchange-traded funds (ETFs) allow you to invest in gold without having to hold physical gold bullion, making them a simple and potentially lucrative way to diversify your portfolio with gold. Like stocks, gold ETFs track the price of gold and can be bought and sold through most trading platforms or brokerage accounts, making it easy to liquidate them if you need to.
However, you should be aware that investing in gold ETFs is a bit riskier than buying physical gold, as there’s potential for tracking errors. And, gold ETFs come with annual expense ratios that can impact returns over time.
- What to consider: Do your research on different gold ETFs to find one with low expense ratios and minimal tracking errors to maximize the potential returns and reduce the risk tied to this type of gold investment.
Add gold mutual funds to the mix
Gold mutual funds invest in a variety of gold-related assets, offering diversification within the gold sector itself. These funds are professionally managed, which can be beneficial if you prefer a hands-off approach. They also provide exposure to multiple gold-related assets — and this type of gold investment has the potential to outperform other, more passive gold investments.
However, gold mutual funds typically have higher fees compared to gold stocks or gold ETFs — and there’s always the potential for underperformance due to management decisions. You also have less control over specific investments within the fund.
- What to consider: It’s important to compare the fund’s performance history against relevant benchmarks and consider the expense ratio when choosing a gold mutual fund.
Invest in silver or other precious metals
Diversifying beyond gold into other precious metals like silver, platinum and palladium can provide additional portfolio balance. Each of these metals has unique supply-demand dynamics and industrial applications, which can affect their price movements differently from gold. This diversification within the precious metals sector also offers potential for higher growth due to industrial demand.
And, these metals are often more affordable than gold, allowing for easier entry into the market. However, these metals can be more volatile than gold and may require more research. For physical metals, storage and insurance considerations are also factors to keep in mind.
- What to consider: Research the specific supply-demand dynamics of each metal. For example, silver often has a higher industrial demand, while platinum and palladium are crucial for other uses.
The bottom line
Diversifying your investment portfolio with gold and precious metals can provide a valuable hedge against economic uncertainty and inflation. By spreading investments across various gold-related assets and other precious metals, investors can potentially reduce overall portfolio risk and position themselves to benefit from different market conditions. However, it’s important to remember that diversification is an ongoing process. Regularly reviewing and adjusting your portfolio allocation is crucial to maintaining an appropriate balance that aligns with your financial goals and risk tolerance.
Legislation to expand Social Security benefits to millions of Americans passed the U.S. Senate early Saturday and is now headed to the desk of President Joe Biden, who is expected to sign the measure into law.
Senators voted 76-20 for the Social Security Fairness Act, which would eliminate two federal policies that prevent nearly 3 million people, including police officers, firefighters, postal workers, teachers and others with a public pension, from collecting their full Social Security benefits. The legislation has been decades in the making, as the Senate held its first hearings into the policies in 2003.
“The Senate finally corrects a 50-year mistake,” proclaimed Senate Majority Leader Chuck Schumer, a Democrat from New York, after senators approved the legislation at 12:15 a.m. Saturday.
The bill’s passage is “a monumental victory for millions of public service workers who have been denied the full benefits they’ve rightfully earned,” said Shannon Benton, executive director for the Senior Citizens League, which advocates for retirees and which has long pushed for the expansion of Social Security benefits. “This legislation finally restores fairness to the system and ensures the hard work of teachers, first responders and countless public employees is truly recognized.”
The vote came down to the wire, as the Senate looked to wrap up its current session. Senators rejected four amendments and a budgetary point of order late Friday night that would have derailed the measure, given the small window of time left to pass it.
Vice President-elect JD Vance of Ohio was among the 24 Republican senators to join 49 Democrats to advance the measure in an initial procedural vote that took place Wednesday.
“Social Security is a bedrock of our middle class. You pay into it for 40 quarters, you earned it, it should be there when you retire,” Ohio Senator Sherrod Brown, a Democrat who lost his seat in the November election, told the chamber ahead of Wednesday’s vote. “All these workers are asking for is for what they earned.”
What is the Social Security Fairness Act?
The Social Security Fairness Act would repeal two federal policies — the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) — that reduce Social Security payments to nearly 3 million retirees.
That includes those who also collect pensions from state and federal jobs that aren’t covered by Social Security, including teachers, police officers and U.S. postal workers. The bill would also end a second provision that reduces Social Security benefits for those workers’ surviving spouses and family members. The WEP impacts about 2 million Social Security beneficiaries and the GPO nearly 800,000 retirees.
The measure, which passed the House in November, had 62 cosponsors when it was introduced in the Senate last year. Yet the bill’s bipartisan support eroded in recent days, with some Republican lawmakers voicing doubts due to its cost. According to the Congressional Budget Office, the proposed legislation would add a projected $195 billion to federal deficits over a decade.
Without Senate approval, the bill’s fate would have ended with the current session of Congress and would have needed to be re-introduced in the next Congress.
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Saturday is the winter solstice and 2024’s shortest day. Here’s what to know about the official start of winter.
The 2024 winter solstice, the shortest day of the year, happens on Saturday, Dec. 21, in the Northern Hemisphere. The celestial event signifies the first day of winter, astronomically.
What is the winter solstice?
The winter solstice is the day each year that has the shortest period of daylight between sunrise and sunset, and therefore the longest night. It happens when the sun is directly above the Tropic of Capricorn, a line of latitude that circles the globe south of the equator, the National Weather Service explains.
The farther north you are, the shorter the day will be, and in the Arctic Circle, the sun won’t rise at all.
How is the day of the winter solstice determined?
The winter solstice occurs because of the Earth’s tilt as it rotates around the sun.
When the Northern Hemisphere tilts away from the sun, the nights last longer. The longest night happens on the solstice because the hemisphere is in its furthest position from the sun. That occurs each year on Dec. 21 or 22.
This year, it falls on Dec. 21 at 4:21 a.m ET, to be precise.
On the summer solstice, when the northern tilt is closest to the sun, we have the longest day, usually June 20 or 21.
National Weather Service
The solstices are not always exactly on the 21st every year because the earth’s rotation around the sun is 365.25 days, instead of 365 even.
Will days start getting longer after the winter solstice?
Yes. Each day after the solstice, we get one minute more of sunlight. It doesn’t sound like much, but after just two months, or around 60 days, we’ll be seeing about an hour more of sunlight.
When will winter officially be over in 2025?
The meteorological winter ends on March 20, 2025. Then, spring will last until June 20, when the summer solstice arrives.
How is the winter solstice celebrated around the world?
Nations and cultures around the world have celebrated the solstice since ancient times with varying rituals and traditions. The influence of those solstice traditions can still be seen in our celebrations of holidays like Christmas and Hanukkah, Britannica notes.
The ancient Roman Saturnalia festival celebrated the end of the planting season and has close ties with modern-day Christmas. It honored Saturn, the god of harvest and farming. The multiple-day affair had lots of food, games and celebrations. Presents were given to children and the poor, and slaves were allowed to stop working.
Gatherings are held every year at Stonehenge, a monumental circle of massive stones in England that dates back about 5,000 years. The origins of Stonehenge are shrouded in mystery, but it was built to align with the sun on solstice days.
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The Hopi, a Native American tribe in the northern Arizona area, celebrate the winter solstice with dancing, purification and sometimes gift-giving. A sacred ritual known as the Soyal Ceremony marks the annual milestone.
In Peru, people honor the return of the sun god on the winter solstice. The ancient tradition would be to hold sacrificial ceremonies, but today, people hold mock sacrifices to celebrate. Because Peru is in the Southern Hemisphere, their winter solstice happens in June, when the Northern Hemisphere is marking its summer solstice.
Scandinavia celebrates St. Lucia’s Day, a festival of lights.
The “arrival of winter,” or Dong Zhi, is a Chinese festival where family gathers to celebrate the year so far. Traditional foods include tang yuan, sweet rice balls with a black sesame filling. It’s believed to have its origins in post-harvest celebrations.
Researchers stationed in in Antarctica even have their own traditions, which may include an icy plunge into the polar waters. They celebrate “midwinter” with festive meals, movies and sometimes homemade gifts.