Investing in gold has been one of the most popular retirement investments since the early 1900s.
It was first used as an investment back in the 1800s, and it continues to hold its value well into the 21st century.
While gold prices fluctuate, investing in gold has proven itself to be a safe bet.
In addition, it offers investors peace of mind knowing that their money is protected against inflation.
However, despite these benefits, investing in gold isn't for everyone.
Some people don't trust the stock market, others aren't interested in buying physical assets, and still others simply don't understand the risks involved.
That said, if you're willing to invest in gold, here are five reasons why it makes sense to do so.
#1. Physical Asset Protection
Physical asset protection is one of the greatest benefits of owning gold.
Because gold is tangible, it provides greater security than stocks or bonds. If the economy were to collapse, or if the U.S. dollar were to become worthless, investors would still be able to access their gold holdings.
This means that your wealth is protected regardless of what happens to the markets.
#2. Low Volatility
Unlike stocks and bonds, gold doesn't fluctuate much over time. This means that you won't see wild swings in the price unless something drastic occurs.
For example, the Dow Jones Industrial Average dropped nearly 1,000 points in October 2008, yet gold remained relatively stable.
The same thing happened after the financial crisis of 2007-2008. While the Dow fell by 20%, gold actually rose slightly.
#3. Tax Benefits
Taxes are another benefit of investing in gold.
When you purchase shares of publicly traded companies, you pay taxes on any earnings those companies generate.
On the other hand, when you invest in gold, you receive a tax deduction equal to the fair market value of the metal.
So you save money on taxes when you invest in gold.
#4. Liquidity
Liquidity refers to the ease with which you can convert your assets into cash.
Since gold is a physical asset, it's easier to liquidate than stocks or bonds.
You can sell your gold without paying capital gains taxes.
Furthermore, you can easily exchange your gold for dollars or euros, which gives you more flexibility when converting your funds.
#5. Peace of Mind
Finally, investing in gold helps provide peace of mind.
When the stock market drops, you may feel anxious about your portfolio. However, gold remains steady, which reduces stress levels.
Additionally, unlike stocks and bonds, gold does not depend on the success of a company.
As such, you don't have to worry about whether or not a certain stock is going to perform well or poorly.
With gold, you know that your money is secure no matter what happens in the world.
Even though investing in gold comes with its share of risks, it's worth considering if you'd like to retire early.
