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How Bullion Investments Can Transform Your Retirement

In today’s financial landscape, the pathway to a secure retirement relies on two factors: the specific investments you make and the overall approach you take to manage your funds. It’s not just picking the right assets, like stocks or property, but also how you combine all elements of your financial plan to maximize your income later in life.

Top advisors specialize in guiding investors towards a future where their wealth is not just preserved, but also has the potential to thrive. Investing in physical bullion — whether gold, silver, platinum, or palladium — from authorized and reputable Canadian bullion dealers presents a compelling option for those looking to bolster their retirement portfolios.

For one, it offers a practical hedge against inflation and currency devaluation: two concerns that can erode the value of traditional retirement savings over time. Diversification is key in any robust plan, and adding precious metals to the mix can mitigate risks associated with market volatility.

Beyond diversification, bullion carries the unique advantage of being a physical asset, giving investors a sense of security and tangible value. Moreover, the liquidity of bullion means retirees can quickly convert their holdings into cash, providing flexibility when it’s needed most.

As we explore these investment strategies, remember that adding bullion to your portfolio is about preparing for the future in a way that creates a stable and promising financial outlook for your retirement. Below, we’ll unpack the key advantages of bullion and how it can be the cornerstone of any well-rounded retirement strategy.

Bullion Provides a Hedge Against Inflation and Currency Devaluation

Inflation is the tide that consistently erodes the value of our currencies. Canada has seen the purchasing power of the dollar ebb and flow over the decades. Inflation rates have oscillated between lows of 0.2% and peaks of 12.5%.

As most of us are only too well aware, over time, the same amount of money will buy us fewer goods and services. For example, if you set aside $2,000 of your savings in 1990, it would have seen a staggering devaluation of over 82% of its original purchasing power by 2023 (i.e., it would need to rise to roughly $4,800 today to cover the same range of expenses).

Bullion stands in stark contrast to the fluctuations of fiat currency. By investing in gold bullion (or silver or platinum, for that matter), you’ll enjoy a solid base of stability that shields against the erosion of your cash. While the value of currency may fall due to inflation or devaluation, the value of precious metals may remain stable or even increase, thus safeguarding your wealth.

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To continue our example: instead of cash, if you invested $2,000 in gold or silver bullion in 1990, you’d be in a much stronger position. In 1990, gold was priced around $383.73 USD per ounce, which would mean $2,000 would garner a purchase of 5.2 ounces. Fast forward to January 2024, and gold was approximately $2,034.04 per ounce. Those 5.2 ounces would have a value today of about $10,577 USD.

Silver tells a comparable story. That hypothetical $2,000 would have secured 400 ounces at about $5 apiece in 1990. With prices in January 2024 sitting at approximately $23.85 per ounce, your investment would have grown to $9,540 USD.

These percentages tell a story of resilience and reward. With its reliable intrinsic value, bullion acts as a dependable guardian of wealth — and is particularly critical when planning your retirement. By parking a portion of your earnings in precious commodities, you’re not just investing; you’re insulating your future against economic upheaval.

Bullion Helps Diversify Retirement Portfolios

Achieving a balanced portfolio is a critical goal for investors, and including bullion investments is a strategic way to enhance this balance. Bullion’s strength lies in its historically low correlation with conventional assets, such as stocks and bonds. This means that when the stock market takes a downturn or when bonds underperform due to rising interest rates or other economic factors, the value of bullion often remains stable — or even increases.

Historical market performance supports this notion. In the wake of economic crises and high market stress, such as the global financial crisis in 2008, gold prices rose in the face of falling stock markets, rising from its lowest value for the year at $692.50 per ounce to nearly $1,900 per ounce three years later. Silver prices initially fell but then increased as investors searched for safe-haven assets — rising from nearly $15 an ounce at the start of 2008 to approximately $17 by the end of the following year.

Likewise, when central banks print money and currencies weaken, the price of gold often soars —reflective of its role as a store of wealth that transcends fiat currency values. In the 1970s, amid high inflation and stagnant growth, gold rose in value. The S&P 500 fell by nearly 40% in 1973; meanwhile, by the end of 1974, gold had nearly quadrupled in price from 1970 to almost $200 an ounce.

During the early stages of COVID-19, stock markets experienced significant downturns — but silver prices followed a similar trajectory to gold, dipping initially and then surging. After dropping to lows in March 2020, silver prices rebounded and peaked later in the year, gaining value even when traditional equities faced challenges.

Including a measured allocation to bullion within a retirement portfolio can help maintain a level of stability against unpredictable swings of the market, protecting against downside risk while still offering opportunities for growth. It’s not about replacing traditional assets, but rather about complementing them to balance your portfolio and suit your retirement goals.

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Bullion Offers an Unparalleled Sense of Security

In the form of highly pure bars or coins, bullion is a tangible asset, able to be physically possessed and stored, that provides a sense of security and permanence in direct contrast to the abstract nature of stocks and digital assets.

In the digital age, wealth can feel ephemeral and contingent on the stability of digital platforms. Simply put, bullion exists outside this realm. Terms of possession aren’t defined by digital ledgers or computer algorithms; it’s a form of wealth that can be touched, stored, and passed on to people and agencies without the need for electronic intermediaries.

As we become more dependent on the internet, we’re also witnessing a steady rise in cyber threats. These can be particularly acute and troubling for seniors or those in their retirement years. When stored appropriately using a reputable bullion storage service, bars or coins can neither be hacked nor erased.

Transactions involving bullion can also be conducted discreetly, with minimal documentation and without the obligatory participation of financial institutions. This level of discretion empowers investors to manage their retirement savings on their own terms.

It’s crucial to understand that bullion has served as a reliable form of currency and wealth preservation for millennia. This proven durability bolsters its appeal for many retirees, since it offers a sense of continuity in a world characterized by rapid change and uncertainty, unrest and faltering assets. The permanence of bullion stands can serve as a psychological anchor for those who seek constancy amid change.

The choice to include bullion in a retirement portfolio implies maintaining direct, personal control one’s assets. It underscores the desire for a retirement grounded both in financial stability and in the enduring value of our years of work.

Bullion’s Liquidity Means Fast and Flexible Access to Cash

Precious metals, such as gold and silver, are renowned for their high liquidity, which makes them an appealing asset for those planning their retirement. The liquidity of these metals implies that they can be bought and sold with relative ease in the marketplace, facilitating a swift conversion into cash when necessary.

This is especially pertinent for retirees who can encounter situations requiring immediate funds — whether for unexpected healthcare expenses, emergencies, or taking advantage of a timely investment opportunity.

The global gold market included daily trading volumes averaging around $132 billion in 2022, underscoring gold’s ease of trade. While subject to greater price volatility, silver also boasts a highly liquid market, constantly attracting both sellers and buyers to authorized silver bullion dealers. This degree of liquidity ensures that retirees can readily liquidate their precious metal holdings, often without a steep loss in value, and even amidst economic downturns when other assets might be depreciating.

Moreover, the ability to convert precious metal assets into cash promptly allows retirees greater control over their financial resources. They can make more informed decisions about when to sell based on their individual needs or prevailing market conditions, without the limitations often associated with less liquid investments that could incur early withdrawal penalties or have unfavourable terms, such as certificates of deposit, RRSPs, annuities, bonds, and so forth.

A Note on Prudent Investing

It’s imperative to approach bullion investments prudently.

Given that precious metals can experience price fluctuations and may underperform when compared to other asset classes like stocks, any good financial advisor will recommend against over-concentrating your retirement funds in them. The general advice is to limit the allocation to a modest percentage of your portfolio, commonly suggested to be no more than 5% to 10%.

The most reliable bullion dealers will never pressure you into a purchase or attempt to sway you with ‘too-good-to-be-true’ deals. Professional suppliers aren’t out for a quick buck, so to speak, but here to ensure their customers are taken care of with courtesy and respect.

Looking Ahead

For many, bullion is a cornerstone of their retirement strategy. At Global Bullion Suppliers, we invite investors of all ages to envision a future where their wealth is not only preserved but is also capable of maintaining a personal legacy — that it stands as a treasure passed down to generations to come.

For more information on how bullion can transform your long-term savings and investment plans — or to understand the difference between collectible and investment bullion, which can help identify the most appealing approach for you — contact one of our trusted experts today. We have over 15 years of industry experience helping people get to grips with all things bullion, including terms, the buying process, premiums and beyond.

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