Few would argue that we live in an unpredictable market. As a result of this fact, many are looking for ways to diversify their assets. The stock market is a traditional solution, but with the economy being up in the air, lots of people are turning to gold as a safe haven.
Is gold right for you? Read on to find out.
How Is Gold a Safe Haven?
Gold has always been seen as a safe place to keep your money, especially when times are uncertain. Why? Because gold isn’t tied to the stock market or dependent on how well companies are doing.
While the S&P 500 can rise and fall based on corporate earnings or economic trends, gold just exists. It’s physical, real, and unaffected by the latest quarterly report.
For example, during the 2007-2009 financial crisis, the S&P 500 took a nosedive, dropping nearly 50% — but gold surged by 39%. Gold has a reputation for doing well when the stock market is struggling, offering a sense of stability that stocks can’t always guarantee.
The S&P 500 is an index of 500 leading publicly traded companies in the U.S., and it’s seen as a measure of how the stock market — and the broader economy — is doing. When the economy is strong, the S&P 500 can deliver impressive returns. However, when things go south, like during a recession or market crash, you could lose a significant chunk of your assets.
What makes it unpredictable is that it’s tied to the economy. If companies aren’t doing well, neither is the S&P 500. And as we’ve seen in recent years, relying on corporate earnings and stock prices can feel a little like gambling with your savings.
How Does Gold Compare to the S&P 500?
It’s clear that the S&P 500 and gold move differently.
While the S&P 500 thrives when the economy is booming, gold tends to shine brightest when things are shaky. That’s why so many people are choosing to buy gold now — especially with the growing uncertainty around banks and the economy.
Gold provides a layer of security because it’s not connected to any corporation’s performance or the daily fluctuations of the market. Moreover, gold’s value isn’t tied to the success or failure of any company, making it a safer place to put your money when you’re worried about what’s going on in the world.
Why Does a Gold IRA Make Sense?
If you’re thinking about making a move into gold, a Gold IRA could be the way to go. It’s a self-directed retirement account that lets you hold real, physical gold, giving you both the stability of gold and the tax benefits of an IRA.
With a Gold IRA, your savings are backed by something real — gold bars or coins — not the performance of a stock market that seems to be on a rollercoaster.
Protect Your Finances
American Hartford Gold can help you get started by acquiring the gold for your IRA so you can feel confident knowing your retirement is protected by something more reliable than the S&P 500.
Sources:
The Great Recession and Its Aftermath | Federal Reserve History
Gold prices during and after the Great Recession | BLS
Stock Market Crash Definition | Investing Dictionary | U.S. News
