Gold has long been a popular investment and has served as a reliable hedge against inflation. As the current market uncertainty continues, adding some gold to your portfolio may be a good idea for some investors. However, before you consider Investing in gold stocks as part of your portfolio strategy, carefully review your personal and financial goals and objectives.

Investing in gold stocks the many ways to acquire gold, investing in the companies that mine or refine it provides a potential source of solid returns and the added benefit of lower transaction costs than buying physical bullion. Investors can buy shares of these companies, known as miners, through exchange-traded funds (ETFs) or purchase futures contracts. Gold futures are agreements that give the holder the right to buy or sell the precious metal at a specified price on a future date.

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Mining companies can provide diversification because they are typically uncorrelated to the broader stock market, making them a good alternative to bonds and stocks during volatile markets. Moreover, well-managed mining companies can magnify increases in the price of gold, and they may yield more steady income than other commodities, including real estate.

Ultimately, though, gold’s value lies in its utility as a medium of exchange. Unlike paper money, it can be used to pay for goods and services. As a result, it is best purchased as a long-term asset with a high degree of liquidity, which reduces the risk that you will need to liquidate it at a loss during an emergency.