10 Mistakes to Avoid When Buying Gold in 2026
Buying gold can be a great way to diversify your portfolio, especially if you want to hedge against inflation and stock market uncertainty. However, making a few rookie mistakes when investing in gold can introduce unnecessary risk and could hurt your long-term returns.
For example, some retirees may regret investing too much in gold too quickly.
This mistake and others are easy to avoid. Read on for mistakes to look out for and how to avoid them.
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Mistakes about timing, distribution and more
While adding precious metals to your portfolio comes with benefits, it’s important to understand both the pros and cons before investing. You should also ensure that the purchase of gold is compatible with your risk tolerance, objectives and time horizon.
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As you get started, here are 10 mistakes to avoid:
- It goes all in after the scary title: The stock market is full of short-term noise, and it’s important to stay focused on the long-term picture. News headlines can make investors more prone to emotional decisions that harm their long-term returns.
- Very fast shopping: You don’t have to get all your exposure to gold right away. Gradually building your position over time and setting limits on how much gold should be included in your portfolio can make investors less susceptible to this error.
- Ignoring how gold fits into the overall system: Gold is a small piece of a portfolio that should generally not take up more than 5-10% of your total assets. Investors can talk to fiduciary advisors if they are unsure of how much gold should be in their portfolios.
- Selling more gold during a bull market: While gold can serve as an important hedge, there are certain situations in which the S&P 500 will meet and outperform gold. That is not a good time to sell gold and put it in the stock market. Gold is designed to protect your portfolio rather than maximize returns. It’s natural for gold to fall behind the stock market during certain cycles, but that usually doesn’t guarantee a complete gold exit.
- Choosing high pressure sales clothes: A gold dealer should not post a deadline made at the point of sale or tell you to buy gold. Research gold suppliers before buying from them.
- Not understanding the payment structures: Gold retirement accounts (IRAs) can have excess fees that make it more beneficial to use a traditional IRA and buy shares of a gold exchange-traded fund (ETF) instead. Before committing to any gold supplier, check their fee schedule to know the cost.
- Buying collectible coins: Investing in gold can be complicated — and buying collectible gold coins can add to the complexity. There are many variables that determine the value of these coins. It is often easier to buy grams or ounces of gold or choose a gold ETF instead of physical gold.
- Keeping large amounts at home without security: It happens that gold at home is lost, stolen or damaged.
- Losing key documents: Losing important records about gold can cause potential buyers to question its authenticity if you want to sell it. Investors should arrange their documents to ensure that any piece of gold is legitimate.
- Misunderstanding the IRA rules: Not only do gold IRAs tend to have higher fees, but they also have different rules regarding storage. You are not allowed to keep physical gold that is part of an IRA in your home, for example. Make sure you fully understand the IRS rules before investing.
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