Should You Add Gold to Your Retirement Portfolio?

Gold is getting a lot of attention these days. Market uncertainty and concerns about inflation have many retirees wondering if it deserves a spot in their portfolio. 

Dave Popowich and Faisal Karmali recently shared their thoughts, and it is not as simple as gold being good or bad.

Historically, gold has been seen as a safe haven.

It’s certainly a static place to keep your money.  It often becomes more attractive when inflation rises, or interest rates are low. Gold does not generate income like stocks or bonds, but it is often viewed as a store of value during uncertain times.

Gold also has its drawbacks. Dave and Faisal pointed out on a recent episode of More Than Money legendary investor Warren Buffett has never been a fan of gold. He says gold does not produce anything. It just sits there. It does not generate cash flow, and it is difficult to determine its real worth. Unlike a business that grows and earns money, gold’s value depends entirely on what someone else is willing to pay.

Volatility is another issue.

Gold can perform well in certain periods, but there have been long stretches where it has delivered no growth. In that episode of More Than Money Dave and Faisal highlighted a recent nine-year span where gold’s price remained flat. (Source 1)

The key takeaway.

Investment decisions, including whether to buy gold, should be based on personal financial goals and comfort with risk. Decisions should not be driven by news or social media headlines or market fads. If gold fits your plan, and helps you feel confident about your finances, it can make sense. If the motivation is simply because everyone is talking about it, it might be time to reconsider that plan.

Gold can play a role in a retirement strategy, but as Dave would say, a strong financial plan and a diversified approach are still the foundation.  Join us at our latest retirement seminar where we discuss why gold and other strategies could be choices for you in your retirement portfolio.

David Popowich and Faisal Karmali are Investment Advisors with CIBC Wood Gundy in Calgary. The views of David Popowich, Faisal Karmali, and guest author(s) do not necessarily reflect those of CIBC World Markets Inc. This information, including any opinion, is based on various sources believed to be reliable, but its accuracy cannot be guaranteed and is subject to change. This commentary is for informational purposes only and is not being provided in the context of an offering of any security, sector, or financial instrument, and is not a recommendation or solicitation to buy, hold or sell any security. CIBC Private Wealth consists of services provided by CIBC and certain of its subsidiaries, including CIBC Wood Gundy, a division of CIBC World Markets Inc.

Source 1 :https://goldprice.org/gold-price-history.html