Why progressive investors include gold in their portfolio

Investing is anticipating, and the gold price often anticipates geopolitical and market conditions. In this knowledge base article, we answer the question: why do progressive investors include gold in their portfolio?

Reasons to include gold in an investment portfolio

Let’s first look at the main reasons to include gold in an investment portfolio. Below, we list the most important reasons:

Safe haven

Traditionally, investing in physical gold is considered a safe haven. Like silver, gold has a strong reputation for retaining value and is therefore very suitable as an investment during uncertain times. You may receive a slightly lower return than with company shares, but this usually comes with lower risk as well.

Established reputation

As mentioned above, gold has a strong reputation when it comes to value. The historical price chart of gold over recent years clearly shows that gold retains its value, even during economically or politically uncertain times. As a result, gold is also easily tradable, meaning you can quickly convert it back into euros or shares if needed.

Diversification

Gold can significantly contribute to risk diversification in an investment portfolio because it is less economically dependent than stocks or bonds. By investing in both stocks and gold, you can spread the risks in your investment portfolio.

Systemic risks

We prefer not to think about it, but with increasing climate change and geopolitical shifts, there are more systemic risks than there were a few years ago. The stability of certain companies or countries is no longer guaranteed, and this can create uncertainty and economic instability. The recent COVID-19 crisis is a good example of an unexpected change with major impact on the economy, an impact we are still feeling today.

The appeal of gold to progressive investors

More than stocks, bonds, or fiat currencies, gold can offer stability and peace of mind in a stock portfolio during uncertain times. Being progressive means looking ahead—recognizing both opportunities and risks.

That’s why gold is part of the portfolio for many progressive investors. They like to seize opportunities but are also aware that (systemic) risks exist which can negatively affect their investment portfolio. It’s up to a smart investor to develop and follow a strategy in response to this.

How to include gold in a progressive investment portfolio?

Now the question: how should you best include gold in a progressive investment portfolio? You have several options: physical gold, gold ETFs, gold mining shares, and gold futures and options.

Given that one of gold’s primary roles is to serve as a safe haven, the preference leans toward physical gold. With gold shares, price fluctuations and coverage during economically uncertain times are less predictable. Physical gold doesn’t have these disadvantages, you have the certainty that the gold is truly your property.

The Silver Mountain supplies reliable physical gold

It may be worthwhile to store your gold in a secure facility, for example in Switzerland. This way, you don’t have to take security measures yourself or arrange appropriate insurance. It can also offer VAT advantages on certain types of precious metals, since you are not obligated to pay VAT in the country of storage.

Curious about buying physical gold? Take a look at The Silver Mountain’s wide assortment or contact us for more information.

Disclaimer: The Silver Mountain does not provide investment advice and this article should not be considered as such. Past performance is no guarantee of future results.