CBS News
3 reasons to invest in gold this holiday season
Getty Images
It’s been quite the year for gold. The price of the precious metal started 2024 at just over $2,000 an ounce, but gold prices quickly climbed higher — breaking records as the price surpassed $2,400, $2,500, $2,600, and then, in mid-October, $2,700 per ounce.
The price has moderated a bit in the time since, falling back below $2,700 per ounce, but remains high overall. And there are plenty of reasons behind the recent run-up, with geopolitical tensions and high inflation driving consumers to safe-haven assets chief among them. Quickly rising prices have also enticed investors looking for solid returns.
Are you one of the many who have invested in gold this year? If not, there’s still time — and good reason — to do so.
Learn how to get started with gold investing today.
3 reasons to invest in gold this holiday season
Here’s why experts say you may want to buy some this holiday season.
It protects against future inflation and recessions
According to Eric Elkins, CEO of financial consulting firm Double E, you should consider investing in gold in a recession — or even if one is just expected.
“If you believe today or in the future, we are nearing a recession or depression then consider gold as a possible option to plant your money,” Elkins recently told CBS News. “Gold historically has done very well when the U.S. had economic turmoil.”
J.P. Morgan currently estimates there’s a 45% chance of a recession by the end of 2025. And the worse that recession is, “the better gold will do,” says Michael Chadwick, president of Fiscal Wisdom Wealth Management.
“Buying gold pre-recession is very smart,” Chadwick says.
Find out more about the benefits of gold investing here.
It can diversify your portfolio
You may have heard the old adage about putting all your eggs in one basket. Well, the same is true in the investment space. Putting the majority of your money into one asset class is dangerous. If you do that, all it takes is one market downturn for your portfolio to drop a significant amount.
A better approach is to diversify your portfolio with a variety of assets so that when one falls, you have other, still-performing investments to balance it out. Gold is “the asset” when it comes to true portfolio diversification, according to James Cordier, head trader at Alternative Options.
“It adds exposure and diversification to an asset that is not directly correlated to the stock market,” says Christopher Mediate, president of Mediate Financial. “It can be a great hedge against volatility.”
Waiting may cost you more
If investing in some for its safe-haven or diversification benefits is on your agenda, buying sooner rather than later might be wise.
While the future trajectory of gold prices is hard to pin down, some experts predict gold prices could surpass $3,000 per ounce in the coming months. So the investors who wait to buy in? They risk being “priced out,” says Keith Weiner, CEO and founder of Monetary Metals.
“If you choose to wait for a price drop, you might wait a long time and not get it,” Weiner says.
The bottom line
If you’re ready to invest in gold this holiday season, there are lots of ways to do it. You can buy gold bars and coins if you want to own physical gold, purchase gold stocks and ETFs, or open a gold IRA, which offers a tax-advantaged way to invest in gold and save for retirement.
Talk to an investment professional or financial planner if you’re not sure of the best way to invest in gold for your goals and budget.
Watch CBS News
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.
Watch CBS News
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.
Getty Images
Homeowners looking to access a large sum of money in today’s economic climate don’t have to look too far to find it. By turning to their accumulated home equity, owners can potentially finance a major expense (or multiple major expenses) simply by using the money they already have via their home’s value.
While there are multiple ways to do this, many may be considering a traditional mortgage refinance or cash-out refinance. But in today’s unique and constantly changing interest rate climate, that could prove to be a costly mistake. Instead, right now, both home equity loans and home equity lines of credit (HELOCs) are arguably better than refinancing. Below, we’ll explain why.
Start by seeing what home equity loan interest rate you could qualify for here.
Why home equity loans are better than refinancing right now
Here are three reasons why a home equity loan may be more beneficial than a refinance now:
You’ll maintain your existing mortgage rate
The average home equity loan interest rate is 8.41% as of November 19, 2024, but the average mortgage refinance rate for a 30-year loan is 6.93%. So, on the surface, it appears that refinancing is cheaper. But that refinance rate will require you to exchange your current mortgage rate to get the new one.
That could be a costly mistake if you have a rate under 6.93%, as millions of Americans do right now. By applying for a home equity loan, however, you’ll still gain access to your equity, but you won’t need to bump your mortgage rate to get it. And if home equity loan rates drop in the future, as they have for most of 2024, you can simply refinance your loan to the better rate then.
Get started with a home equity loan online today.
You may qualify for a tax deduction
When you use a cash-out refinance, you apply for a loan larger than what you currently owe to your lender. You then use the former to pay off the latter and keep the difference as cash for yourself. Interest paid on mortgage loans is tax-deductible, but so is the interest on home equity loans if used for qualifying purposes. At that higher interest rate, you may qualify for a larger deduction (while still maintaining your current lower mortgage rate).
The average home equity amount is high right now
A combination of low mortgage interest rates during the pandemic, a drop in available inventory and a hesitation to sell now that rates are high again (amid other complex but interrelated factors) has caused the average home equity amount to soar to just under $330,000 right now. If you want to access that with a refinance, as noted, you’ll need to give up your current mortgage rate to do so. And if you want to access it via a credit card or personal loan, the restrictions will be significant. It makes sense, then, to take advantage by using a home equity loan or HELOC instead of taking a gamble with a refinance right now.
The bottom line
With mortgage refinance rates elevated, the unique feature of a potential tax deduction tied to home equity borrowing and a six-figure average equity sum available now, for many homeowners in need of financing it makes sense to skip a refinance for a home equity loan now. That said, this type of financing is tied to your most important financial asset so the decision to withdraw it from it should be carefully weighed against the risks. Consider speaking to a financial advisor or home equity lender who can answer any questions you may have before getting started.
Speak to a home equity loan lender now.
