The safe haven asset investors are flocking to – | U.Ok.Finance News
As market volatility surges, gold is as soon as again within the highlight, attracting investors searching for a safe place to defend their wealth. But whereas gold’s appeal is simple, consultants warn it needs to be approached rigorously – and as half of a broader strategy.Lewis Crompton, founder and CEO at STARTrading mentioned gold’s fame as a haven is properly-earned, describing it as a “well-trodden financial path.” He defined that gold tends to grow in worth “alongside inflation, or quicker,” which is why many view it as “an insurance policy and a way to protect their wealth.” However, Mr Crompton cautions against knee-jerk reactions, noting that buying into any asset class without a clear strategy is “rarely a good decision.” For patient investors, though, gold could be a wise choice. Mr Crompton added: “The value of gold in five years’ time, 10 years’ time or 20 years’ time is very likely to be higher than it is now.”Paul Grant, author of Money Remixed, agreed that gold’s enduring appeal remains strong, even as new assets like cryptocurrencies gain traction. He said: “Precious metals like gold remain time-tested tools for building and preserving wealth.”Highlighting its historical significance, Mr Grant notes that gold has served as a “universal store of value” since it was first minted in 600 BC, transcending “time, borders, and cultures.” Central banks today still hold vast reserves, underscoring its role as a symbol of “monetary security and financial sovereignty.”Gold’s traditional role as a hedge against inflation is particularly relevant now. Mr Grant said: “As the cost of living rises and paper currencies lose purchasing power, gold tends to maintain, and often increase, its value.”For example, in the aftermath of the 2008 financial crisis, gold prices nearly doubled.As well as offering protection against inflation, gold also acts as a counterbalance to more volatile assets like stocks and cryptocurrencies. According to Mr Grant, successful investing is “not just about picking winners – it’s about managing risk.”Allocating just 5% to 15% of a portfolio to precious metals can lower overall volatility, a strategy widely recommended by financial advisers.Additionally, gold’s tangible, finite nature makes it attractive in today’s increasingly digital economy. Mr Grant said: “There is something reassuring about holding a physical asset that can’t be hacked, erased, or inflated into worthlessness”Investors have a range of options for gaining exposure to gold, from physical bullion and exchange-traded funds (ETFs) like SPDR Gold Shares (GLD), to mining stocks and more sophisticated futures strategies.However, Mr Grant said that gold is best seen as a portfolio anchor, not a high-growth investment. He said: “Building wealth isn’t just about chasing returns – it’s also about preserving what you’ve earned.”Ian Futcher, a financial adviser at Quilter, echoed these views, noting that gold prices “usually rise during durations of financial and stock market uncertainty.” Recent volatility – pushed by occasions like President Trump’s introduction and U-activate tariffs – has again pushed gold costs to new highs. Prices have elevated from round £1,620 per ounce in early 2024 to more than £2,400 in April 2025.However, Mr Futcher confused that whereas gold can cushion a portfolio during downturns, it mustn’t dominate. He mentioned: “It is important that gold only plays a part in your portfolio and is not your only holding. Following market falls, equities have the potential to bounce back sharply, and you do not want to miss the best days that usually come early in the recovery.”For investors all in favour of gold, Mr Futcher warned that bodily possession comes with challenges, reminiscent of storage, insurance coverage, and security prices.A more accessible route is likely to be gold investment funds, which monitor the price of gold and permit simple shopping for and promoting.Mr Futcher mentioned multi-asset funds that embrace gold alongside different property like stocks and bonds are additionally price contemplating, offering publicity to valuable metals whereas balancing long-term growth potential.As all the time, don’t invest more than you possibly can afford to lose, and contemplate talking to a financial adviser earlier than making any selections.
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