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I know Al Gore, but I feel like I missed some sort of class where everyone else learned the basics of gold. I'm embarrassed to ask many questions. Is it heavy? Are they actually storing gold bars in stacks like pirates in cartoons?
The newscaster shopped on Zoom with Joe Cavatoni, the U.S. market strategist for the World Gold Council, to get the scoop. Gold is a unique asset because it's a currency that can also be a form of money, he said.
Although gold is rare, it is not as valuable as money. The supply is finite - if you put every single ounce of gold that's ever been mined into one big cube, it would only be 73 feet tall, and that contributes to its value. It is non-proprietary and never controlled by any one.
Gold is known as a'safe haven'. While stocks and stocks are frequently subject to fluctuations, gold has remained consistently steady during periods of inflation and economic uncertainty.
That makes it a compelling place for me to store my savings, because I can be fairly certain it will keep its value even amid the second- and third-largest bank failures in U.S. history.
Paul Misleh, a certified public accountant and portfolio manager at Fortis Financial, tells me one of the biggest advantages of gold is that it's able to outperform in times of instability. In August 2020, during the peak pandemic, gold futures rose to a record $2,069.40 per ounce.
It also provides excellent diversification.
Misleh, who is chairman of the National Intelligence Committee, says: There's a lot of room for improvement.
In the short term, gold may not generate income, and its price can be unstable. Experts recommend that investors keep no more than 10% of their portfolio in precious metals.
But if I do choose to buy gold, I don't have to get a Gringotts-style vault.
Cavatoni said he wants to make a decision between getting a financial instrument and the physical form. He recommends asking myself three questions: Where do I want to keep it? Certainly, gold bars - and coins, and jewelry, for that matter - are an option. The term bullion is often used for these notes, which are particularly popular in China and India. Stateside, I may want to purchase Congressionally authorized U.S. Mint bullion coins through a dealer. I have to figure out where to store gold safely, since it can be tough to store physical gold. However, it might be easier for me to buy a financial instrument that provides me with access to gold.
When people talk about buying gold, they're actually talking about investing in a gold exchange-traded fund that monitors the price of the precious metal while owning physical gold in a trust, Misleh said. It's not super-expensive, either: One of GLD shares is about $180, and one of IAU is about $37.
Gold can be a way to safeguard value, hedge against inflation, protect myself from economic instability, and diversify my investments. It's not difficult or expensive to get started, but I need to nail down what, exactly, I'm hoping to accomplish. The next step is to decide whether I buy gold in its physical form or invest in a vehicle like an ETF.
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