When markets get shaky or headlines start shouting about inflation, it's no surprise that gold starts shining again in the eyes of investors—especially those nearing retirement. But is buying gold or gold ETFs really a smart move for your retirement portfolio?

Let’s dig into the pros, cons, and common myths—so you can make an informed decision before jumping on the gold bandwagon.

Physical Gold vs. Gold ETFs

First, let’s define the difference. Physical gold is, well, gold you can hold—coins, bars, or jewelry that you stash in a safe or lockbox. It has intrinsic value, is rare, and has been used as currency for thousands of years. If the grid goes down and the dollar collapses, it’s something you could barter with.

On the other hand, gold ETFs (Exchange Traded Funds) are financial instruments tied to the price of gold. You don’t actually own the gold itself, but you benefit from changes in its market price. They’re easier to buy, sell, and store—but they don’t offer that same “doomsday prepper” comfort of physical gold.

Is Gold a Good Hedge Against Inflation?

A lot of marketing pushes the idea that gold is a great hedge against inflation. But that hasn’t really held up since the U.S. went off the gold standard in the 20th century. While gold does sometimes perform well during economic uncertainty, it doesn’t consistently rise when inflation rises.

What it can do is provide some diversification—if used strategically. Gold ETFs can act as a counterweight to certain market movements, but timing is everything. Holding gold ETFs indefinitely can erode your returns, much like holding options or leveraged ETFs too long.

What’s the Smart Strategy?

Here’s the truth: if you’re thinking about gold purely because you're nervous about the markets, that’s not a good enough reason to invest. Diversification should be purposeful. You need to know why you're diversifying and what risk you’re protecting against.

Instead of chasing gold, retirees may want to focus on assets that offer a more reliable inflation hedge or provide consistent income. For example:

• Preferred shares offer fixed dividends, giving you income even when markets are volatile.

• Government treasuries and fixed income investments can offer security and predictability.

• Inflation-hedged assets and contracts that respond to changes in interest rates may offer better protection than gold.

And don’t forget the power of owning real businesses, which can provide tax advantages and tangible returns—not just theoretical “value.”

Gold in Your IRA?

There is one situation where owning gold might make a little more sense—inside your IRA. While physical gold outside your retirement accounts offers limited benefits, holding it in a tax-deferred IRA can make it slightly more strategic. If you’re inclined to own gold, doing it within an IRA may help you preserve tax benefits while still holding a tangible asset.

Still, it’s not for everyone. And for most people, there are better, more effective tools for building a resilient retirement portfolio.

The Bottom Line

Gold and gold ETFs can sound appealing—especially when fear is in the air—but don’t let headlines drive your decisions. There’s a difference between owning something of value and owning something that actually works for your retirement goals.

Before you make any moves, get a second opinion. Our team can help you weigh the pros and cons and explore smarter, more reliable ways to protect and grow your nest egg.

Ready to take the next step in your retirement planning? Schedule a consultation with the Yields4U Team today.