Photo of Eric R. Ebbert, CFP®, MBA, CEO Eric R. Ebbert, CFP®, MBA, CEO Nov 05, 2020

One of the most common armchair-expert colloquialisms that investors may hear is to invest in gold or silver because the current economy is not based on anything real. Of course, the suggestion that the market is not based on anything real is absurd. The market is based on a variety of commodities and industries, national and international trading, and other items and services of value. 

The idea that somehow gold will become the only item worth anything if the market struggles makes a lot of assumptions — primarily that we will automatically default to using gold for trade if the dollar ever fails. The reality is, the value of silver or gold is only as good as what someone is willing to pay for it, which is exactly how anything else works in the market.

All of that being said, gold and silver do have value, especially in the jewelry industry, but does that mean investing in gold and silver is a good idea? It is hard to say.

Should I be investing in gold or silver?

Make sure when you ask this question that you really mean investing, not saving and gambling on selling at a higher value. Investing and gambling both involve risk and choice, but gambling is a short-term activity in hopes of gaining riches, while investing is a lifetime activity that involves more strategy, planning and balancing your portfolio with productive assets.

Gold is an unpredictable asset. You cannot simply buy gold and assume it will have a lot of value in the future. One ounce of gold is always one ounce of gold. It does not create wealth; it is worth whatever the market says it is worth. 

What you should do is pay attention to the performance of gold and silver in the market. Consider making investments in gold and silver as part of your diverse portfolio if you predict they will perform well. However, it would be wise to avoid putting all your hopes in gold and silver. Keep your portfolio diverse. Have long-term and short-term investments through a variety of investment channels, such as exchange-traded funds (ETFs), bonds and mutual funds. 

Talk to a ProVise CFP® professional about your investment strategy

Before buying a bunch of gold and silver in hopes that it will make you wealthy one day, take a step back and talk with a professional about forming a real strategy for long-term and short-term investments.

At ProVise Management Group, our CERTIFIED FINANCIAL PLANNER™ professionals can get to know you and your current financial circumstances, goals, risk tolerance and personal values to help you develop a plan that works for you. We can also create a written plan for you at a fiduciary standard of care. All our written plans come with an unconditional money-back guarantee. If you are unhappy with your written plan, you can return it to us, and we will refund 100% of the fee paid.

Are you ready to talk to a professional about your investment strategy? Contact ProVise today to schedule a complimentary consultation.