If there is one asset class that gets investors fired up, it has to be gold. It’s either a love it or hate it kind of relationship when it comes to precious metals investing.
On one hand, investors are so-called gold bugs who believe the sky is falling and that currency will end badly. On the other hand, investors tend to follow Warren Buffett’s approach and consider it not really an investment at all.
But let’s forget about the absolutes for a minute. For those investors willing to meet in the middle, gold could be a powerful tool to help your portfolio. The key is to not go crazy and understand what you are buying.
Three Big Reasons to Hold Gold
When it comes to building our portfolios, we acknowledge the roles both stocks and bonds play. Stocks are generally for growth – with income as a side objective – while bonds are there to provide some stability. The problem is, when it comes to alternatives like gold, we’re pretty clueless. And when investors don’t understand something, they generally leave it well enough alone.
Speaking of income, the basic materials stocks could be just what you are looking for.
That’s really a shame when it comes to gold as the asset class can pay some pretty significant benefits.