Gold is an attractive commodity that you may be considering for your investment portfolio this June. Not only is the precious metal a staple in the jewelry industry, it has multiple other uses. But, for many investors, the real value of gold is its ability to bring stability to a portfolio. And, it’s becoming even more attractive against a backdrop of persistent inflation and geopolitical risk.
But, you shouldn’t blindly invest in any asset. Instead, it’s important to make well thought out investment decisions. That’s especially true when you invest in gold. So, what smart gold investing moves should you make this June? Below, we’ll detail three.
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3 smart gold investing moves to make for June
Adding gold to your investment portfolio can have a meaningful impact on your investment outcomes. But, it’s important that you make wise decisions when investing in the precious metal. Here are three smart gold investing moves you should make this June:
Get invested now
Gold has had a strong year thus far in 2024. The price of the commodity was just $2,063.73 per ounce on January 1, 2024 and by May 20, 2024, it had climbed more than 18% to $2,439.98 per ounce. Today, the price of gold is down from its recent record high, trading at $2,342.92 per ounce.
But, those declines may represent an opportunity.
Financial assets tend to move through a series of peaks and troughs. So, recent declines may only be an opportunity to purchase gold at a discount to its recent record high. And, doing so quickly will mean you have the ability to take part in any gains that may be ahead.
Invest in gold now before the cost of entry has a chance to rise.
Use gold as a hedge against risk
Gold is a safe haven investment. That means when economic, geopolitical and other market risks are present, investors often add gold to their portfolios as a hedge against those risks.
And, at the moment, these risks are present. The April inflation rate was 3.4%, significantly higher than the Federal Reserve’s 2% target. At the same time, geopolitical unrest continues abroad. Not to mention, this is a U.S. presidential election year, which can affect markets and the broader economy.
With these risks in mind, adding gold to your portfolio this June can help maintain the value of the assets you’ve set aside for later in life.
Limit your investment
Considering the risks mentioned above and the fact that gold acts as a safe haven, you may be tempted to invest in as much gold as you can afford to buy at the moment. But that could be a mistake.
When investing, it’s important to consider your asset allocation and how under- or over-exposure to certain assets can impact your portfolio.
“Typically, I’d say investors should allocate around 5% of their assets to gold, but no more than 10% in the average portfolio,” explains Matt Willer, managing director of capital markets at the investment management firm, Phoenix Capital Markets. “It’s a defensive inflation hedge, but there is opportunity cost on your capital so you really don’t want to overweight into these types of positions unless you have a strong thesis where this sector is going to outperform other options.”
So, maintain this 10% gold allocation limit in your portfolio as you invest in the precious metal.
The bottom line
Gold is a versatile asset, and when invested in properly, it can have a positive impact on your risk-adjusted returns. As we move into the month of June, there are a few smart gold investing moves you can make. First and foremost, get started now. You never know when gold may start rising in price again – and waiting too long can lead to a higher cost of entry. Moreover, use gold to hedge against risk while keeping in mind that you shouldn’t have more than 10% of your assets invested in the commodity. Compare your gold investing options now.
