So, when you invest in gold, periods of high inflation and bear markets will give you higher returns instead of losing value.
Let’s look at some examples:
- Since 1971, whenever inflation has been above 3%, gold has returned an average of 15% per annum.
- Data collected over 38 years, from 1973 – 2011, shows a high correlation between the gold price and inflation rates. When inflation rises, fiat currency loses value while gold gains value.
- Inflation is reaching record highs around the world. The price of gold has also been reaching record highs in recent times.
These results come down to the finite nature of gold. The scarcity of the precious metal gives it anti-inflation qualities, whereas fiat money is unlimited and can be printed on demand, which puts it at a high risk of inflation.
It’s something that’s playing out in front of our eyes right now. Inflation rates are soaring, fiat currency is in free fall in many places around the world, and the cost of living is climbing.
Protecting your assets and wealth is only becoming more important. Smart investments will inflation-proof your portfolio, softening or completely eliminating the blow that’s being dealt to all of us on the way to hyperinflation.
Based on historical data, gold is an investment that will protect your assets.