Entrepreneurs are all about taking risks. You staked it all on starting your own business, becoming your own boss, and building something bigger than yourself. When it comes to your business, you’re all about innovation, risk-taking, and putting it all on the line to succeed. But when it comes to your personal finances, there is a lot to be said for creating financial stability for yourself.
The goal of business success is to create wealth for yourself, your investors, your partners, and your staff. Once you’ve created that wealth, you need an investment strategy that will both grow and safeguard the progress you’ve made.
One underrated asset class that you can use to protect your financial gains is gold bullion, and this is how.
1) Portfolio Diversification
Smart investors know that portfolio diversification is key to protecting your savings. Markets are constantly in flux, and while some assets rise, others fall.
Most of the diversification strategies you’re likely to see online focus on balancing different types of stocks and may also include bonds. What gold bullion offers is an alternative that usually reacts to market stimuli differently than both stocks and bonds.
Gold is a preferred safe haven for investors when markets crash, while it also competes with bonds during periods of high inflation.
2) Hedge Against Inflation and Currency Devaluation
You worked for your wealth, and the last thing you want is for inflation to erode the value of your hard-earned savings. After decades of a low-inflation economy, inflation today has kicked up a notch, and it’s unlikely to return to pre-2019 levels anytime soon. The global economy has changed, and investors need to change with it.
The long-term outlook on gold is that it is a reliable strategic inflation hedge. The asset historically maintains its value against inflation in the long term. In the short term, gold is not particularly sensitive to increases in the CPI thanks to the availability of other hedges, but it remains one of the better assets for preserving value over the course of decades.
3) High Liquidity vs. Other Conservative Assets
How does gold compare to other conservative assets? Investors tend to turn to term deposits and investments like real estate to protect their savings from the volatility of the stock market.
Compared to all of these assets, selling your gold is relatively quick and easy. You can sell gold to a local bullion dealer for fair prices based on the market. By comparison, term deposits have penalties if you want to withdraw your money early, and real estate is one of the more complicated assets to sell.
4) Safe Haven in Uncertain Times
Gold is widely known as a fear-driven investment. A rapidly-dropping market or global event that introduces a high degree of uncertainty can often spark a great deal of interest in gold bullion. Including safe haven assets in your portfolio protect your savings from the risks of geopolitical and economic uncertainty.
5) Wealth Preservation
The number one reason to invest in gold bullion is that it preserves your wealth. All of the features above make gold a great asset if your goal is capturing the gains you’ve made and making sure they last a very long time.
Entrepreneurs looking to secure their wealth can benefit from including gold bullion in their portfolios. Make sure market volatility and inflation don’t undo the progress you worked so hard to gain.
