Rising tensions with Iran are pushing oil and energy prices higher, fueling inflation concerns and unsettling financial markets. For Americans approaching retirement, that volatility can feel especially unnerving.
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During periods like this, investors should look beyond stocks and toward assets that have historically held up better during times of inflation or geopolitical stress. According to Adam Bergman, founder of IRA Financial, the goal during these times should be to build a retirement portfolio that can weather uncertainty.
Here are two “safe-haven” investments Bergman said long-term savers should consider as volatility rises.
Gold Often Gains Value During Inflation and Market Stress
During times of market volatility, Bergman recommended investing in hard assets such as gold.
“Since COVID, I’ve definitely become far more bullish on gold,” he said. “This is especially true since 2022, when inflation spiked, and it’s now an asset that I’ve been allocating more of my own retirement savings to.”
Because it’s a tangible asset with limited supply, gold has historically served as a hedge against rising prices and inflation.
“Speaking to a number of clients over the last few weeks, inflation is clearly the biggest area of concern, and that’s why gold has become such a popular investment option,” he said. “It’s a hard asset with a built-in hedge effect that has historically performed very well during inflationary periods.”
While gold isn’t immune to price swings, it can provide stability when stocks struggle.
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Crypto Can Fit Into a Long-Term Retirement Strategy
While more volatile than gold, crypto plays a different role in a retirement portfolio, particularly for investors with time on their side.
“I truly believe crypto, especially bitcoin, is an important asset that Americans should have some exposure to,” Bergman said. “Just like gold, real estate or private business investments, I think that to have a properly diversified portfolio, you need exposure to these types of assets.”
However, crypto should only be a portion of a well-diversified portfolio — and how much of your portfolio you dedicate to crypto should be based on your personal circumstances.
“The percentage of exposure depends on the size of your retirement portfolio, your age and your comfort level with risk,” Bergman said. “In my opinion, the reward of owning bitcoin far outweighs the risk — but it can certainly lose value at times. Still, the upside and potential price appreciation over the years make it an investment worth holding.”
Bergman believes crypto may be best suited for investing within tax-advantaged accounts with long time horizons, such as Roth IRAs.
“If it goes down in value, you’re not forced to sell because it’s in a retirement account with a long-term horizon,” Bergman said. “If it goes up in value, you can lock in your tax-free gains since it’s in a Roth IRA.”
Why Retirement Portfolios Benefit From Non-Stock Assets
Whether investors choose gold, crypto or other alternatives, it’s important to have a diversified portfolio — especially during periods of inflation and geopolitical uncertainty.
“The investors who have performed the best are those who are well-balanced and diversified,” Bergman said. “That means having at least 50% to 60% exposure to alternative assets such as real estate, gold, private investments, loans and crypto, in tandem with equities and some fixed income.”
Concentrating too much of a retirement portfolio in equities can be risky when inflation is high, since rising costs and higher interest rates can put pressure on company profits and stock valuations.
“If all your savings are tied into equities and we experience a period of high inflation, company values will be depressed because the future value of company profits will be diminished,” Bergman said.
A more diversified portfolio, by contrast, can help smooth out market swings.
“I would expect that the majority of IRA Financial clients are not losing sleep in a highly volatile investment environment, like we have now, because they should have a balanced portfolio,” Bergman said. “Their equities may be down in price, but their real estate and gold should increase in value, providing them with an overall stronger retirement portfolio.”
For retirement savers, combining equities with assets that have historically held value during times of economic uncertainty, such as gold or crypto, may help reduce risk and provide greater stability over time. As Bergman emphasized, the right mix depends on each investor’s goals, timeline and comfort with risk, but spreading exposure across multiple asset classes can make uncertain markets easier to navigate.
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This article originally appeared on GOBankingRates.com: Iran Tensions and Inflation Risks Rise: 2 ‘Safe-Haven’ Investments To Consider Now
