Is Now the Time to Buy Gold? Here’s What You Should Know
Stock market volatility can be scary for any investor – but it can come with added risk for retirees.
That’s why those who are grateful at or near retirement often want more stability in their portfolios as they say goodbye to regular income. But they also need to allow for some growth in their portfolio to account for the reality of rising costs and longevity. Gold is another asset that can provide some long-term growth potential, diversification and a hedge against inflation.
What gold does (and doesn’t) do for your portfolio
Gold has long been considered a safe haven during times of economic uncertainty as it is often uncorrelated with the stock market and can perform well even when stocks are down. It is also considered a hedge against inflation and a strong portfolio diversifier.
But there are downsides, too. Some market cycles see rising stock prices and falling gold prices. Also, gold does not provide any cash flow like other assets, such as stocks and bonds. Investing in gold can also be difficult. If you don’t buy gold fund shares, you may need to deal with complex financial instruments like futures and swaps or pay additional costs to buy physical gold, such as insurance, storage and shipping costs.
This means that while precious metals can be a great way to diversify your portfolio, it’s important to keep them in a small portion of your total assets.
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If you add gold it might make sense in 2026
Investors concerned about stock market volatility may want to consider allocating some money to gold, which can help mitigate losses during stock market corrections.
The right time to buy gold depends on your risk tolerance, goals and financial situation. People looking to reduce risk and diversify away from stocks may want to consider precious metals. But remember that precious metals work best if you can keep these goods for several years.
And you don’t need to rush into gold. Instead, it may make sense to buy a small amount and gradually increase your holdings over time. Experts generally say to keep your gold allocation to no more than 5-10% of your overall portfolio, depending on your risk tolerance.
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Why you might want to skip buying gold
For some investors, gold may not be a wise purchase. Investors with very short time horizons and small nest eggs, for example, may want to focus on less risky assets.
Investors should also avoid gold if they have a lot of debt or are in financial trouble. Retirees in that situation will generally want to focus on paying off their debt and building their savings before investing in the stock market or buying gold.
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How to buy gold for the first time
Some gold investors have to watch out for various costs, such as spreads, fees and maintenance. Investing in a gold exchange-traded fund (ETF) makes these funds easy, and may be the best choice for beginners.
If you’re not sure whether gold is right for you, talk to a fiduciary advisor. These financial advisors need to work in your best interest and can give you suggestions on how to include gold in your portfolio.
