Dave Ramsey Recommends Investing in Gold and Silver
Dave Ramsey is an American financial adviser, author, and radio host who has provided financial guidance to many people to improve their finances. In addition to writing numerous books – such as The Total Money Makeover and Financial Peace University – Dave has advised many individuals who seek his guidance to regain financial control.
He hosted a personal finance show on Fox Business Network from 2007-2010.
Ramsey often criticizes precious metals markets for being volatile, suggesting other investments would be preferable. Unfortunately, he misses key details about gold and silver that should be considered when investing.
1. It’s a commodity
Many investors view precious metals as assets to protect their portfolio in times of economic volatility, yet gold and silver prices fluctuate depending on supply and demand factors.
This trend can be partly explained by public emotion (fear or confidence), real interest rates (holding cash that offers actual interest returns may be preferable than holding gold), energy costs, metal mining operations and other variables.
Physical metal investments offer an easy, safe, and straightforward investment solution compared to many other investments that require third party storage and incur fees – they’re protected against market crashes, internet blackouts, theft attempts or market instability. Furthermore, you can pass them on easily – often seen when parents give gold ornaments as wedding or other major life event gifts!
2. It’s a form of money
When assessing any investment, it’s essential to take the history of its asset into account and learn all you can about its composition and usage as money – something precious metals have done remarkably well in during periods of economic volatility.
Not surprisingly, precious metals have earned themselves a reputation of being more risky than stocks or mutual funds despite both experiencing high price volatility. One reason could be their inability to generate income like businesses and bonds do; additionally, physical gold and silver storage costs may become prohibitively expensive over time.
By contrast, stocks and mutual funds offer dividends that help cover their expense ratios, while precious metals provide unique protection from market and inflation risk that other asset classes don’t offer – therefore it wouldn’t be out of line to maintain some allocation to precious metals within your diversified portfolio.
3. It’s a hedge
Precious metals provide an effective diversifier against market volatility. Not only can they store wealth safely, they also don’t carry as much credit risk than stocks and don’t correlate as closely to global events like political instability and currency weakness.
Gold and silver also provide an effective hedge against inflation, though their average annual returns may be modest; their purchasing power has proven more protected by no other asset class during periods of high inflation. Plus, these metals tend to correlate less closely with stocks and real estate investments than many others do.
Notably, Ramsey does not possess extensive expertise in precious metals. To successfully invest in them, one should consult with an experienced precious metals investment advisor – Atlanta Gold & Coin Buyers can assist with this goal – contact us now and get started with us.
4. It’s a countercyclical asset
Investment in precious metals can provide a source of stability during economic turmoil. To determine whether gold and silver should form part of your portfolio, consult a financial advisor. SmartAsset offers free tools that connect you to qualified advisors in your area so that you can meet without cost with potential advisor matches and interview them before making a decision.
Gold has generally gained ground during each of the nine largest stock market crashes since 1976, except for some short-lived instances. Gold serves as an effective safeguard against inflation – which occurs when poor monetary policy causes purchasing power of currency to decline over time – by providing protection from currency devaluation.
Gold and silver are physical assets you can hold in your hand compared to stocks, currencies and cryptocurrencies which are just numbers on a computer screen; experts generally advise investing no more than five to ten percent of your assets in gold and silver investments.
Categorised in: Blog