Investing part of your savings in gold bullion can be an intelligent strategy for adding safe haven assets to your portfolio. Gold offers some unique qualities as an asset, such as diversifying a stock-heavy portfolio, a robust defensive investment that has historically performed well in times of crisis, and a reasonably high level of liquidity compared to other defensive assets like bonds.
But an important part of investing isn’t just buying at the right price, it’s also knowing the right time to sell. Gold bullion comes with the added complication of where to sell your gold coins, as you will need to find a buyer for physical items.
Fortunately, there’s an abundance of gold buyers who offer competitive prices for bullion products, lending to gold’s relative liquidity. Make sure you get several quotes, and you should be able to secure the right price. But as for the timing, there are several factors that should play a part in your decision.
#1 The Price of Gold That You Paid
It’s not just about the current price of gold. Investors who try to time the market are rarely successful, and it often comes down to luck more than analysis. Even the most experienced traders struggle to successfully predict prices, and buying and selling with price fluctuations is generally riskier than staying the course.
That said, you should keep in mind the price you paid. Unless you have an urgent need for the cash, don’t panic-sell gold. Wait until you can secure a price with a margin of gain that you’re comfortable with.
#2 Your Goals with the Funds
Let’s say that the price of gold has risen substantially, and you have an opportunity to turn a significant problem. The question you need to ask is, what are your plans with those funds? There’s always the chance that prices could only be headed higher. It’s impossible to predict but often makes it hard to make a decision about your gold.
Those alternatives could include another investment opportunity. As your assets have grown, you may find you have more risk tolerance, and you’re looking for higher potential returns.
You might also want to sell gold to pay off debt. As an asset that does not generate interest, you can improve your overall financial health by offloading gold and clearing debt.
#3 You Need to Rebalance Your Portfolio
Many investment strategies rely on asset distribution to meet growth goals with risk tolerance. But as some assets rise in value and others stagnate or fall, eventually, your asset distribution will change, even if you haven’t made any active interventions.
That’s when it’s time to rebalance your portfolio to realign with your goals. For example, after a stock market downturn, you might see that gold now represents a much higher percentage of your portfolio. Selling some of that gold to reinvest in the stock market can help you buy stocks at a discounted price without risking any new money.
The best time to sell gold is when it fits your overall financial plan. Avoid price watching or trying to predict prices, and you’ll find you make much smarter decisions overall.