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5 gold investments to consider with inflation rising – CBS News

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There are lots of gold assets to choose from, but certain options could make more sense now that inflation is increasing.

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Inflation is no longer hovering near 40-year highs like it was in mid-2022, but we’re not back to normal just yet. The latest inflation report, released this week, shows that the inflation rate was 3.2% in February, up from 3.1% in January. Given the negative impact that stubborn inflation has on traditional currency, many investors are now looking for ways to protect their investments from being eroded by rising prices. And, one traditional hedge against inflation is gold

When inflation rises, the purchasing power of paper currencies inevitably declines. That makes gold, which carries no counterparty risk and cannot be inflated by central banks, an attractive investment for investors who want to preserve their wealth. If you’re looking to add some gold exposure to your portfolio as an inflation hedge, though, it’s important to understand that there are numerous assets to choose from. 

Learn more about how gold investing can protect your portfolio here.

5 gold investments to consider with inflation rising

It may be worth adding these gold assets to your investment portfolio now that inflation is rising:

Physical gold bullion

One of the most direct ways to invest in gold is by purchasing physical bullion in the form of gold coins or bars. Owning the actual metal provides a tangible store of value, one that is not tied to any particular currency or economy.

The downside is you’ll need to securely store and insure your gold holdings, which can come with extra work and extra costs. But if you’re seeking a “crisis commodity” to fall back on, physical bullion is about as close as you can get to having intrinsic, universally recognized wealth.

Explore your top gold IRA options online here.

Gold exchange-traded funds

For a more liquid and convenient way to invest in gold, you can purchase shares of an exchange-traded fund (ETF) that tracks the price of gold bullion. When you buy into a gold ETF, each share represents ownership in actual physical gold bars held by the fund.

Gold ETFs can be a smart option to consider because they provide exposure to gold prices without the hassle of personally acquiring and storing bullion. They can easily be bought and sold just like stocks through any brokerage account. However, there are small annual expenses charged by the funds, which you may want to consider before taking this route.

Gold mining stocks

Rather than invest directly in gold itself, you can gain leveraged upside exposure by buying shares of gold mining companies. When gold prices rise, the profits and stock valuations of the miners tend to surge even higher. You also have the option of investing in gold mining ETFs to gain broad exposure.

The allure of buying gold stocks is the potential for higher returns, which is great in any economic environment, but can be especially useful during times when inflation is devaluing the dollar. However, these stocks also come with higher risk than just owning physical gold or a bullion ETF, so keep that in mind as you narrow down the options.

Gold jewelry and collectibles

Beyond strictly investment purposes, gold jewelry and collectible gold coins can appreciate in value as inflation rises. While these purchases don’t provide direct exposure to gold prices, the precious metal content gives them an intrinsic material value that helps preserve wealth over time.

And, with inflation weighing on other assets, collectors tend to bid up the valuations for rare, historical gold coins in particular. These types of gold investments can grow in numismatic value alongside the underlying metal prices, providing a unique potential return stream.

Gold futures and options

For advanced traders and hedgers, gold futures contracts provide a way to speculate on future price movements or lock in current prices. However, due to the complexity, leverage and risk of losses that are associated with gold futures and options (beyond the initial investment), this gold investing option tends to be most suitable for highly experienced, risk-tolerant traders looking to make leveraged bets on gold prices.

The bottom line

As always with any type of investing, it’s important to understand your time horizon, risk tolerance and objectives before allocating capital to gold. After all, there is a wide range of gold investments to choose from, and those factors will play a role in determining which one works best for you, especially during periods of high inflation. But no matter what gold asset you decide on, when used judiciously, gold can be an important part of a diversified portfolio, providing a hedge against the insidious effects of inflation.

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Investment

Tesla shares soar more than 14% as Trump win is seen boosting Elon Musk’s electric vehicle company

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NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.

Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.

“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”

Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.

Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.

Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.

Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.

In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.

The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.

And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.

Tesla began selling the software, which is called “Full Self-Driving,” nine years ago. But there are doubts about its reliability.

The stock is now showing a 16.1% gain for the year after rising the past two days.

The Canadian Press. All rights reserved.

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S&P/TSX composite up more than 100 points, U.S. stock markets mixed

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TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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S&P/TSX up more than 200 points, U.S. markets also higher

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TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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