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In recent years, with inflation surging and theinterest rates meant to tame it hitting their highest point in decades, Americans have explored alternative investments. Amid this environment, it's critical to invest in assets that can both protect and grow your money. One such investment is gold. Known for its ability to hedge inflation and diversify your portfolio, investing in the precious metal has rocketed up in recent years, hitting an 11-year high last September.
But while gold has multiple benefits for investors, it hasn't typically been known as a reliable income-producer. Investors looking for that are (typically) better off considering alternatives. But the recent gold prices have some reconsidering this approach. The price of gold has hit multiple record highs in recent weeks with no signs of cooling anytime soon. But can you make money by investing in gold now — or are you better served with more volatile assets? That's what we will break down below.
Learn more about how gold could boost your portfolio here today.
Can you make money by investing in gold now?
While you can make money by investing in gold, it's generally a long-term investment that takes months, if not years, to turn a major profit.
Except, arguably, right now.
With gold currently (and often) increasing in price, you may be able to turn a quick profit now by buying in before the cost becomes prohibitive. Just look at recent gold prices to see how much you could make. If you bought gold on March 1, for example, you would have paid $2,082.55 per ounce but that same price is now $2,391.34 for that same amount – a $308.79 difference or 15% higher month-over-month.
And many experts expect that price to rise even further, particularly if inflation remains as sticky as it currently appears. So while today's gold price may be high, it could be the lower option if you wait a few weeks or months to buy in. "Gold's 400%+ performance over the past twenty years clearly demonstrates that it's a very good long-term investment and a great portfolio diversifier," Alex Ebkarian, COO and co-founder of Allegiance Gold, a gold IRA company, recently told CBS News.
That noted, there are important caveats to consider. The price of gold today may not be exactly what you can buy it for. You may need to account for any markup dealers or companies selling it add on top, thus reducing your potential profit margin. But, more importantly, gold is still not considered a reliable income-producing asset in the same way stocks and bonds are. So while the price of the metal may be appealing to investors now — and you may be able to make more money more quickly than usual — you should still limit gold to 10% or less of your portfolio.
Learn more about buying gold here today.
The bottom line
When it comes to investing, timing is key. And right now the timing appears right to buy into gold. With the price of the precious metal breaking numerous records in recent weeks and no signs of cooling on the horizon, investors considering this asset should strongly consider acting now before the price is out of reach.
But that doesn't mean you should discount the traditional gold investing advice that normally applies, either. By taking a balanced and nuanced approach to buying gold now, however, you'll improve your chances of success, regardless if you want to sell it quickly or hold for long-term portfolio diversification and protection.
Matt Richardson is the managing editor for the Managing Your Money section for CBSNews.com. He writes and edits content about personal finance ranging from savings to investing to insurance.
