Does Dave Ramsey Recommend Investing in Gold?
Investors looking to add precious metals to their portfolio must take several factors into account before doing so, including understanding its history and emotional climate, while learning everything they can about precious metals.
Personal finance expert Dave Ramsey recently posted an article that stated why investing in gold was not wise, which will be disputed here. This piece challenges many of his statements.
History
Gold has long held an irreplaceable place in human culture. It inspires wonder, serving as a store of value and form of currency alike – even acting as a barometer to gauge society.
Gold was treasured among ancient civilizations before it could be refined for industrial use, existing only as unwieldy nuggets found in nature and celebrated for their beauty. Because its malleability lends itself so easily to ornamentation and weaponry use, its appeal was no secret to ancient civilisations.
Gold has increasingly become a means of investment since World War II. Countries once pegged their currencies to it through what was known as “gold standard,” until after two world wars when Bretton Woods broke down and its price increased steadily due to inflation’s impact; inflation tends to drive down currency value while increasing commodity costs such as gold.
Volatility
Gold prices tend to level off over time. Some investors seek more stable investments such as stocks or real estate; even though this could increase their risk.
Precious metals experts from Atlanta Gold & Coin Buyers note that Ramsey’s arguments against gold are founded in emotion rather than hard data. He asserts that investing in it would not be wise due to US dollars not being backed by gold, while also suggesting it is no way an effective hedge against inflation.
He’s wrong on both counts. Gold has historically served as an effective inflation hedge and should do so again in the future, which is why understanding gold prices’ history and their volatility before you invest will help you make smart investment decisions.
Taxes
Listening to Dave Ramsey can give an indication of where his views lie on gold investing: instead he prefers other investments like real estate and your 401k; investing in physical gold requires extra costs like safe storage that could add up quickly.
As soon as you sell gold at a profit, its capital gains will be subject to taxation under IRS guidelines, since collectibles such as gold are taxed at higher rates than other investment assets. There are ways of mitigating taxes related to your gold investments by seeking advice from an advisor on your investment strategy; but ultimately you should only add it gradually into your portfolio for diversification purposes or by purchasing shares of gold mining companies on the stock market.
Investments
Investing in precious metals is a dangerous business that could quickly lose value. Instead of dwelling on gold prices or commodities prices, more reliable investments such as real estate or mutual funds might be better options. Atlanta Gold & Coin Buyers’ precious metal experts can assist in understanding trends and market conditions which affect prices of precious metals such as gold, silver, platinum and more.
Gold prices tend to increase when stock markets or paper currencies decline, because gold serves as a safe-haven asset that protects against inflation and volatility.
Ramsey does not specialize in precious metals, so his opinions can sometimes be misinformed. He claims that precious metals do not offer protection from inflation, which is demonstrably false when taking into account historical trends on this matter. It shows he lacks an in-depth knowledge on this subject.
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