Precious Metals are Financially Strong During Economic Downturns, Making Them the Best Solution for Retirement Investment
Torronto, Onterio, Canada, 19th Dec 2022 – Financial institutions are wrestling with market uncertainty for the coming year. Some are predicting that the global economy is heading toward stagflation in 2023, threating the financial well-being of middle- and low-income earners and retirement savers. The World Bank notes that “Compounding the damage from the COVID-19 pandemic, the Russian invasion of Ukraine has magnified the slowdown in the global economy, which is entering what could become a protracted period of feeble growth and elevated inflation… This raises the risk of stagflation, with potentially harmful consequences for middle- and low-income economies alike.” In order to beat stagflation, some financial experts recommend converting or rolling over retirement accounts into Gold IRAs.
While market indicators are notoriously tricky to read, investors are generally preparing for stagflation. According to the Bank of America, over 92% of hedge fund managers are expecting economic conditions to worsen in 2023. In the United States, the inflation rate recently reached its all-time high since the late 70s and early 80s. The Federal Reserve Chair Jerome Powell noted that “The inflation data received so far for October and November show a welcome reduction in the monthly pace of price increases. But it will take substantially more evidence to give confidence that inflation is on a sustained downward path.” To make matters worse, the global inflation rate is expected to between 5.7% – 8.3% under stagflation scenarios.
All these points of data, combined with the current global conditions brought about by COVID-19 and the war in Ukraine point to a very real risk of worldwide stagflation. “Russia’s war against Ukraine has boosted prices for energy and food and has contributed to upward pressure on inflation,” Powell noted. The losers in this economy are those who are forced to rely on fixed incomes or those saving for retirement.
That is why so many investors recommend investment in gold with a reliable gold ira company and other precious metals as a means of safeguarding personal wealth. In particular, rolling over some or all of the funds existing IRAs or other retirement accounts can help to maintain their value or increase it for the duration of bear economic conditions.
See also: What is a Gold IRA? Investors’ Risks VS Benefits
Gold has been on an upward trend over the last decade, alongside other precious metals such as platinum and palladium. However, during periods of economic downturn, gold outperformed the market by a significant margin, its value inversely correlated to the weakening of the dollar. During the peak of inflation in the 1980s, gold nearly tripled its value. Even after market conditions stabilized, gold prices were still more than double what they had been prior to the inflation peak.
While there is no consensus on the overall direction of the economy, stagflation in 2023 represents a significant possibility – one that would represent a devastating blow to many Americans. Even without the threat of stagflation, there are still indicators of recession or financial hardships due to world conditions. Given gold’s stability and performance during economic downturns, it is the number one recommended investment to hedge against inflation and stagflation for 2023 (benzinga).
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Disclaimer: The views, suggestions, and opinions expressed here are the sole responsibility of the experts. No Fin Fact Buddy journalist was involved in the writing and production of this article.