Timing your investments is often the difference between success and failure. But accurate timing is difficult to get right, especially in today's economic terrain. With inflation surging again, geopolitical uncertainty continually resulting in market swings and elevated interest rates on pause for the foreseeable future, it's particularly difficult to manage your investments now. And that extends to choosing the right investment types, too. In this climate, it may be advantageous to research alternatives that you may not have normally considered in a different economy.

Gold can be one option worth serious contemplation right now. The precious metal has a well-earned reputation as a hedge against inflation and as a reliable portfolio diversifier. And, this May, the price may actually fit the budget of more investors after it previously grew past numerous records over the past 18 months. But those are just some of the high-level reasons a gold investment could make sense for you this May. Below, we'll detail three specific other ones worth knowing.

Protect your portfolio from today's market volatility with a gold investment here.

Why a gold investment makes sense this May

While each investor's goals and budget will differ, many could actually benefit from adding a portion of gold to their portfolio this month. Here's why:

The price has declined substantially

Gold may be expensive, but it's not nearly as costly as it was just a few months ago. In January, for example, gold reached its highest price to date at $5,589.38 per ounce. As of May 5, however, the precious metal was selling for just $4,563.99 for the same amount. That's more than a $1,000 drop in less than three months, or, put another way, the price of gold has declined by more than 18%. 

That makes now a smart, much more affordable time to get invested. And you don't even have to pay that much, as fractional gold options allow investors to get started at a much lower cost. Still, gold's price tends to rise over time, so this affordable window of opportunity should be exploited as it could soon close again, perhaps before the month has even ended.

Invest in gold before the price rises again here.

Protection from inflation remains critical

The next inflation report from the Bureau of Labor Statistics is set for a May 12 release. But if that one is anything like the previous one, in which inflation surged to its highest level in multiple years, investors may want to seriously consider gold now. Because of its historic reputation for holding steady and even eventually rising in price during inflationary periods, gold has often been considered a smart investment. 

And that's particularly true now with inflation this May more than a full percentage point above the Federal Reserve's target 2% goal. While that may erode the power of the dollar and your other investments, gold can offer some stability and reduce those impacts.

Stock market volatility illustrates the importance of a diversifier

The S&P 500 and Nasdaq Composite indexes hit new highs in mid-April, but that followed an especially volatile March in which the market was constantly adjusting to overseas conflicts, geopolitical uncertainty and rising oil prices. And with these factors still not fully resolved, it makes sense to consider gold again. As noted above, gold can function well as a diversifier, helping to offset some of the economic pain felt by reduced performance from stocks and bonds.

At the same time, it's critical that investors limit their gold holdings, too, to avoid overcrowding those other, income-producing assets. That generally means limiting gold to 10% of your overall portfolio, though that cap may be lower depending on your investor profile and goals.

The bottom line

A gold investment in the inflationary period of 2022 to 2025 has largely been a smart choice. However, this May, it's arguably an even more important one worthy of serious consideration. With the entry price point much lower than it had been earlier this year, the need for inflation protection is particularly timely, and with stock market volatility underlining the importance of a diversified portfolio, gold makes special sense for investors right now. Review your options carefully, then, and consider speaking with a gold investing company directly, as a representative can help you get started in a measured and strategic way now.