Gold, Silver and Bitcoin: How These 3 Assets Have Protected Wealth in Uncertain Times
Is there a foolproof way to avoid large portfolio swings? Whether you are young in your investment journey or are nearing retirement and looking for a way to avoid large dips in your portfolio’s value, it’s important to understand what history says about storing wealth.
In this article, we’ll cover how gold, silver and bitcoin fare during uncertain times and what this means for your portfolio.
Gold Shines During Uncertain Times
Gold has historically been a strong hedge against inflation. This means that as volatility increases in the market, gold remains relatively stable. Not only does gold hold its value, but it’s also a liquid asset. For example, you can walk into any pawn shop or jewelry store and sell your gold on the same day.
During the pandemic, the value of gold grew stronger. In fact, in January 2020, the price of gold was at $1,581 per ounce, according to Macrotrends. By the end of 2020, the price grew to $1,895, which is an almost 20% gain. Part of the reason gold remains a stable investment during uncertain times is that it is globally recognized as valuable.
Check Out: 13 Cheap Cryptocurrencies With the Highest Potential Upside for You
Read Next: 6 Subtly Genius Moves All Wealthy People Make With Their Money
Silver Remains Stable During Uncertain Times
Silver has been used alongside gold during uncertain times; however, it isn’t as stable as gold. The intrinsic value of silver is heavily dependent on its use as an industrial commodity and a monetary metal.
Looking back to January 2020, the price of silver was at $18.012 per ounce. By December 2020, the price had appreciated to $26.396 per ounce. This represents an over 46% price increase. The gold-to-silver ratio reached a high point in 2020, causing many investors to shift part of their portfolio into silver to protect against uncertain times.
Bitcoin Fluctuates During Uncertain Times
Bitcoin hasn’t been around for centuries like gold and silver, making it much more volatile. Large gains and losses are common, especially depending on economic factors like monetary policy, unemployment and inflation.
In January 2020, the price of bitcoin was at $6,985.47, per Yahoo Finance. However, at the start of the pandemic, the price dropped to $4,970.79 on March 12, 2020. While the price did rebound to $29,001.72 by the end of December 2020, the decline in the share price shows the volatility of bitcoin during uncertain times.
Preserving Your Wealth During Uncertain Times
Storing wealth during uncertain times will look different for every individual, depending on their risk tolerance. For example, some investors will choose to hold stable investments such as gold and silver, while others might be more willing to hold volatile investments, such as bitcoin.
Content Original Link:
" target="_blank">
