The results of a recent Bankrate survey say roughly 40% of Americans are not prepared to withstand the effects of a recession. According to the survey’s explanatory article, the two best ways to get ready for a contracting economy are to pay down debt and be sure to have enough set aside in emergency savings. It’s reasonable to conclude, then, that the 40% believe they’ve done little to nothing about either reducing their debt or fortifying their savings.
It’s hard to quibble with the rationale of saving money and eliminating – or at least lowering – debt obligations when it comes to recession preparation. But noticeably absent from the Bankrate survey is anything related to if or how respondents plan to protect their retirement savings. It’s understandable that the primary concern of Americans during tough times is how their household will fare when the economy is in the tank. However, the devastation that can strike retirement portfolios during the same period could prove to be an even more debilitating problem for individuals in the long run – particularly folks fast approaching retirement years. Fortunately, physical precious metals can serve retirement savers as a valuable portfolio protection resource. Gold and silver have a demonstrated record of rising in value during periods of economic weakness.
Portfolio Security Not Seen as Important Recession Protection Goal
Among other questions, the Bankrate survey asked respondents to select actions they are taking from the following options to help make themselves recession-proof:
- Spending less
- Saving more for emergencies
- Paying down credit card debt
- Saving more for retirement
- Looking for a better or more stable job
Noticeably absent from the list is any task related to protecting current savings, including retirement savings. It makes sense to think first about how one can best survive in daily life so that they emerge from the other side of the recession tunnel still standing. However, if your portfolio is in shambles, that could have significant consequences for what happens to you the rest of your life – particularly if the downturn comes at a time when you’re nearing what should be retirement.
It’s not an insignificant concern. During last decade’s financial crisis, major market indexes lost more than half their value at one point. If that happens again, portfolio recovery could be greatly hampered by what some experts are predicting will be an upcoming “lost decade” for popular assets commonly held by retirement savers.
Even without the additional challenges posed by a lost decade, there is certainly recent precedence for believing a period of long-term rebound from the hardships of recession could be uncertain for many people. Another Bankrate survey – this one from June – found that nearly half of all Americans who were adults during the period of the last U.S. recession have seen “no improvement in their finances” since that time. That’s hardly an inspiring sign.
Gold Could Defend Your Portfolio Against Recession
The reality is that there’s more to preparing effectively for an economic downswing than ensuring the sturdiness of your household’s basic financial structure. That’s obviously important. But if you neglect your retirement portfolio entirely while focusing on the more basic financial survival tasks, you could find that your savings has absorbed a hit of such magnitude that it may not fully recover by the time you need it. Your other preparations may help you survive a weak economy so you can make it to retirement age with your household financials intact. However, if your portfolio doesn’t survive the fall as well, you could spend your retirement years working – rather than being retired.
You may have read last week’s blog article discussing the Dutch Central Bank’s declaration that gold is the asset to which nations will turn to rescue the global economy should it collapse. If it’s an asset that offers the potential to hold entire economies together, it also has the potential to protect the portfolios of individual savers.
Gold’s demonstrated capacity to strengthen during periods of pervasive economic weakness cannot be disputed. During the official period of the last U.S. recession, from December 2007 through June 2009, gold increased 25% while mainstream financial markets sank. But that’s not the whole of it. Remember, the global financial crisis that spawned not only the U.S. recession but recessions all over the world was a broader economic event and it generated negative effects lasting years. Against that multi-year backdrop, both gold and silver not only showed tremendous resilience but rose substantially in price. From November 2008 to April 2011, gold jumped an impressive 110%, and silver did even better than that, soaring about 400%.
The bottom line is that there are select strategies you can implement that offer tremendous potential to defend your savings when the economy is on a downswing. One of those is to include safe-haven assets such as physical gold and silver as a part of your portfolio. If you’re ready to let precious metals do some of the heavy lifting that will be required to keep your portfolio thriving when conditions turn bad, call Augusta Precious Metals at 800-700-1008 to get the straight story on gold and silver.
When you call, you’ll speak to a seasoned gold and silver professional who can apprise you of the range of benefits that precious metals bring to a portfolio. You’ll even find out just how easy it is to purchase physical gold and silver for your IRA. To help ensure your portfolio is prepared – truly prepared – to withstand the effects of a recessionary economy, call Augusta today and speak to a team member about adding gold and silver to your asset mix.