Stock market swings can be scary for any investors — but they can come with added risk for retirees.
That’s why savers in or near retirement usually seek more stability in their portfolio as they say goodbye to a regular paycheck. But they also need to allow for some growth in their portfolio to account for the reality of rising costs and longer lifespans. Gold is an alternative asset that can provide some long-term growth potential, diversification and a hedge against inflation.
What gold does (and doesn’t do) for your portfolio
Gold has long been considered a safe haven during periods of economic uncertainty since it tends to be uncorrelated to the stock market and can perform well even when stocks tumble. It is also considered a hedge against inflation and a strong portfolio diversifier.
But there are downsides, too. Some market cycles see rising stock prices and declining gold prices. Plus, gold does not offer any cash flow like other assets, such as dividend stocks and bonds, do. Investing in gold can also be complicated. If you don’t buy shares of a gold fund, you may need to engage with complicated financial instruments such as futures and swaps or pay extra costs to buy physical gold, like insurance, storage and shipping fees.
This means that while the precious metal can be a good way to diversify your portfolio, it’s important to keep it to a small portion of your overall assets.
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When adding gold may make sense in 2026
Investors who are worried about stock market volatility may want to consider allocating some capital to gold, which can help mitigate losses during stock market corrections.
The right time to buy gold depends on your risk tolerance, goals and financial situation. People who want to minimize risk and diversify away from stocks may want to consider the precious metal. But remember that precious metals are more viable if you can hold these assets for several years.
And you don’t have to rush into gold. Instead, it may make sense to buy a small amount and gradually increase your holdings over time. Experts generally say to keep your gold allocation to no more than 5-10% of your overall portfolio, depending on your risk tolerance.
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Why you may want to skip buying gold
For some investors, gold may not be a smart buy. Investors with very short time horizons and small nest eggs, for instance, may want to focus on assets with less risk.
Investors should also probably avoid gold if they have a lot of debt or are in a cash crunch. Retirees in that situation will typically want to focus on paying down their debt and building up their cash reserves before investing in the financial markets or buying gold.
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How to buy gold for the first time
Some gold investors have to monitor various costs, such as spreads, fees and storage. Investing in a gold exchange-traded fund (ETF) simplifies these fees, and may be the best choice for beginners.
If you aren’t sure if gold is right for you, speak with a fiduciary advisor. These financial advisors are required to act in your best interest and can offer suggestions on how to incorporate gold into your portfolio.
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