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Home » Gold in Times of Uncertainty

The world is crazy. Just last week, the UK government borrowed money from investors and instead of paying them for the loan, the investors have to pay the UK government interest for the privilege of lending money to them. Shocked? I am too. I’m not going to pretend I know how this will turn out but I imagine it won’t be good and may impact us all in the long run.

To paint a picture, imagine getting a car loan and instead of charging you interest, the bank pays you for borrowing money from them!

So, with all this uncertainty and madness, I’m sure many of you have been thinking what you should be doing with your gold. As the value of gold continues to increase, the question I get frequently is “should I sell or should I hold?”

First, it’s important to note that one of gold’s qualities (it has many GREAT qualities) is that it’s an ‘‘insurance’ for our finances when the world goes haywire. One commentator said “… if the price [of gold] goes up, you are supposed to sell them. But most people don’t sell them”.  Often,  people hold on to it if there’s no urgent need for cash and end up passing their gold down to the next generation. Why? Because while many investors buy and sell shares and stocks, they rarely trade when it comes to gold; preferring instead to hold on to it.

Personally, I believe gold is much more than a hedge against inflation; it is a hedge on your life. It’s a hedge and safety net when the unpredictable happens, when the world goes crazy or as the commentator perfectly put it, when the world is “… turning into ‘Mad Max Beyond Thunderdome’.”

Having said this, I’m not saying I would never sell gold. If I urgently needed cash to pay for an emergency – an overdue loan, hospital fees, etc, then yes, I would sell my gold. In short, if selling gold reduces the likelihood of something bad happening in my life or to those near and dear to me, I would sell it in a heartbeat.

I am fortunate to have spare cash, and assuming I have adequate life and medical insurance coverage for myself and my family, I would keep buying more gold until it made up 10% of my investment portfolio. This is what I think would be the right amount of gold I should have. To add context, most financial advisors recommend anything between 5% and 10%.

If I had a higher risk tolerance as well as the ability to hold whatever investments I make for the next 3 to 5 years, I would split my spare cash between equities, bonds, gold and Bitcoin. It’s important to note that these decisions are never the same for two people; it depends on where you are with your money and how much you have to save.

If you have thoughts or different ways in managing your finances, share them in the comment section, I’d love to hear them.

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