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California is home to some of the highest gas prices in the United States, according to AAA.
High taxes are partly to blame for the price of gas in the state. But there’s more to the story.
For drivers who aren’t going electric, there are several ways to save on gas, experts say.

California is home to some of the highest gas prices in the United States, according to AAA.
The national average for a gallon of regular unleaded was $3.40 as of Thursday, according to the organization’s data. In California, the average was $4.87, more than any other state.

Several factors go into what drivers pay for gas, including refining costs, taxes, distribution and marketing, and crude oil prices, according to the U.S. Energy Information Administration.
High taxes are partly to blame in California. The state has the highest gasoline taxes in the nation, according to EIA.
But there’s more to the story.

An isolated market and a special fuel blend

California requires a special blend of gasoline that reduces pollution — and costs more money. 
“California also has seen a drop of 66% in the amount of refineries in operation from where we were 40 years ago,” said Patrick De Haan, head of petroleum analysis for GasBuddy. “So there are fewer refineries producing this special blend of gasoline.” 

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California has an isolated refinery market. The special fuel blend that is consumed in California is produced by 11 major refineries within the state, according to the California Energy Commission. 
“Not many other states use the same blend of fuel, which limits California’s supply when there’s an outage, when there’s an issue at one of our refineries,” Anlleyn Venegas, a senior public affairs specialist at AAA, told CNBC.
The isolated market means that any outages will lead to volatility in prices at the pump. 
“Part of the reason why prices have been so high is that California has really restricted the ability for refineries to expand and grow,” said De Haan. “California has been rather hostile to refinery expansions or oil industry investments, trying to push them away and transition California to more electric vehicles.”

California plans to ban the sale of new gas-powered cars by 2035 as it transitions to cleaner vehicles. A quarter of new cars sold in California in 2023 were zero-emission vehicles, according to the California Energy Commission.
“The high price of gasoline does encourage more EV adoption,” De Haan said. “Americans getting hit with $5 and $6 [per] gallon prices in California is likely accelerating the shift away.” 
In 2023, California Gov. Gavin Newsom signed a new law to combat alleged price gouging at the pump. The law aims to increase transparency in the oil and gas industry and created an independent watchdog called the Division of Petroleum Market Oversight.
“There hasn’t really been much impact,” De Haan said. “But I do believe that in the months ahead, there probably will be more … talk on this subject.” 

Driving behaviors, smart shopping can cut fuel costs

Families are spending thousands of dollars on gasoline each year. In 2022, the average annual spending per consumer unit on gasoline and other fuels was $3,120, according to the Bureau of Labor Statistics. That tally was up 45.3% from 2021, as more people resumed commuting after the pandemic and fuel prices rose.
“Adopting new and improved driving behaviors can contribute to significant savings,” Venegas said.
For drivers who aren’t going electric, here are a few ways to save on gas, according to AAA:

Plan your route before you go

Don’t drive aggressively

Watch the video above to learn more about what is driving gas prices higher and what drivers can do about it. More

With looming tax law changes slated for after 2025, President Joe Biden or former President Donald Trump would face several expiring tax provisions.
“If Congress doesn’t act, taxes will increase for the vast majority of U.S. households,” said Howard Gleckman, senior fellow at the Urban-Brookings Tax Policy Center.

Donald Trump, left, and President Joe Biden during the final presidential debate at Belmont University in Nashville, Tennessee, on Oct. 22, 2020.
BRENDAN SMIALOWSKI | AFP | Getty Images

With looming tax law changes slated for after 2025, there’s a lot at stake this election cycle and voters are already seeing plans from President Joe Biden and former President Donald Trump.
After both candidates dominated Super Tuesday contests, the expected rematch may include familiar tax proposals, experts say.

The White House on Thursday released some of Biden’s tax priorities ahead of his State of the Union speech. These include renewed plans to “make the tax system fairer,” with cuts for working families and hikes for the wealthy and large corporations.
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“After the election, there’s going to be a major tax debate with trillions of dollars on the table,” said Chuck Marr, vice president for federal tax policy for the Center on Budget and Policy Priorities.
Enacted in 2017, Trump’s signature tax overhaul — known as the Tax Cuts and Jobs Act — included individual tax provisions slated to sunset after 2025.
Without changes from Congress, individuals will see higher federal income tax brackets, a larger standard deduction, a smaller child tax credit and more.    

“Whoever is inaugurated on January 20, 2025, is immediately going to confront the need to do something about those expiring tax provisions,” said Howard Gleckman, senior fellow at the Urban-Brookings Tax Policy Center.

If Congress doesn’t act, taxes will increase for the vast majority of U.S. households.

Howard Gleckman
Senior fellow at the Urban-Brookings Tax Policy Center

“If Congress doesn’t act, taxes will increase for the vast majority of U.S. households,” he said. “No politician wants to see that happen.”
However, amid Congressional budget debates, the cost of extending Tax Cuts and Job Act provisions could pose a challenge.
Extending individual tax provisions would increase budget deficits by $2.5 trillion over the baseline from 2024 to 2033, not including debt service costs, according to estimates from the Congressional Budget Office.

Plans to extend individual provisions

While Trump hasn’t shared many specifics for individual tax policy, it’s expected that he wants to make his individual cuts permanent, according to Erica York senior economist and research manager with Tax Foundation’s Center for Federal Tax Policy.
Meanwhile Biden’s fiscal year 2024 budget expressed a desire to extend the individual expirations for those making less than $400,000, she said.
“For 98% of taxpayers, President Biden wants to continue President Trump’s tax cuts,” York said. “The differences come out in what they would do with the rest of the tax code.” More

A turbulent month for New York Community Bank prompted some customers to pull their deposits from the regional commercial bank.
But most consumers should not worry their money will be affected, says former FDIC chair Sheila Bair.

CostFoto | Future Publishing | Getty Images

New York Community Bank has lost 7% of deposits over a turbulent month as customers pulled their money from the regional commercial bank.
A new capital infusion of over $1 billion takes the NYCB off the “watch list” for another potential bank failure, according to Sheila Bair, former chair of the Federal Deposit Insurance Corporation from 2006 to 2011.

“Consumers should not worry about this,” said Bair, who is also a member of the CNBC Global Financial Wellness Council and author of the “Money Tales” children’s book series.
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FDIC deposit insurance coverage generally covers $250,000 per depositor per bank per ownership category. However, it is possible to obtain higher coverage amounts by having different account structures through joint accounts and trust accounts, Bair noted.
“For regular, Main Street households, the $250,000 is more than enough,” Bair said.

More bank failures could be looming

NYCB’s woes come about one year after Silicon Valley Bank and Signature Bank collapsed, followed by First Republic in May.

More bank failures are likely looming amid recession risks, uncertain interest rate forecasts and weakness in the commercial real estate market, Bair warned in a recent editorial in The Washington Post that she co-authored with Charles Goodhart, emeritus professor at the London School of Economics.
Recent bank failures were largely caused by bank mismanagement. Yet legislation to increase accountability for those leaders has stalled on Capitol Hill, they wrote.

Consumers can take comfort in the fact that banking regulators have been working overtime since last year to review the banks and ensure they are carefully monitored, particularly if they have concentrations of risky loans or other types of activities that may cause stress, said Dennis Kelleher, president and CEO of Better Markets, a non-profit organization focused on building a more secure financial system.
“If you’re a depositor, 99% of depositors have no worries, because deposits up to $250,000 are fully insured by the FDIC,” Kelleher said.

How to check your deposit coverage

It’s important for consumers to make sure they are below the uninsured deposit limits, Bair said. To help with that, FDIC provides a tool on its website to help consumers test their coverage.
In the event of a failure, consumers who are below the insured deposit limits can generally expect continued access to their deposits, according to Bair.
“The FDIC has a perfect track record of protecting those deposits,” Bair said. “When a bank fails, in almost all situations, they provide immediate seamless access, there’s no disruption at all in the access to the bank account.”

Depositors have plenty of information to keep tabs on banks, including through financial statements, as well as call reports filed with the FDIC.
“Most regional banks are fine,” Bair said. “The problems have been primarily concentrated in rapid growth regional banks with very poor risk management, and I think that is a small minority of regional banks.”
Yet there are some fragile institutions, which makes it important to tighten up risk management incentives, she said.
Small businesses, which need to protect their cash flow and ability to conduct business, should be on heightened alert, according to Kelleher.
“Small businesses have to be thinking about how much money they’ve got in a bank that may be under stress, and whether or not they feel comfortable with the level of stress the bank is under,” Kelleher said. More

Sonali Pier is a portfolio manager with Pimco

Pimco’s Sonali Pier strives for outperformance.
The youngest of three and the daughter of Indian immigrants, Pier set her sights on Wall Street after graduating from Princeton University in 2003. She began her career at JPMorgan as a credit trader, a field that doesn’t have a lot of women.

“In the ladies room, I don’t bump into a lot of people,” said Pier, who moved from New York to California in 2013 to join Pimco.
Fortunately, she’s seen a lot of changes over the years. There has not only been some progress for women entering the financial business, but the culture has also changed since the financial crisis to become more inclusive, she said. Plus, it’s an industry where there is clear evidence of performance, she added.
“There’s accountability,” she said, in a recent interview. “Therefore, the gender role starts to break down a little bit. With responsibility and accountability and a number to your name, it’s very clear what your contributions are.”
Pier has risen through the ranks since joining Pimco and is now a portfolio manager within the firm’s multi-sector credit business. The 42-year-old mother of two credits mentors for helping her along the way, as well as her husband for supporting her and moving to California sight unseen. Her father also raised her to value education and hard work, Pier said.
“He was the quintessential example of the American dream,” she said. “Being able to see his hard work and a lot of progress meant that I never thought otherwise, that hard work wouldn’t lead to progress.”

Pier’s work has not gone unnoticed. Morningstar crowned her the winner of the 2021 U.S. Morningstar Award for Investing Excellence in the Rising Talent category.
“Pier’s cautious contrarianism and rising influence at one of the industry’s premier and most internally competitive fixed-income asset-management firms stands out,” Morningstar said at the time.

Putting her investment strategy to work

Pier is the lead manager on Pimco’s Diversified Income Fund, which was among the top performers in its class — ranking in the 13th percentile on a total return basis in 2023, according to Morningstar. It has a 30-day SEC yield of 5.91%, as of Jan. 31.
“We’re really broadly canvassing the global landscape, and then looking for where there’s the best opportunities,” Pier said. “It’s getting the interest rate sensitivity from investment grade, high-quality parts of EM [emerging markets], and the equity-like sensitivity from high yield and the low-quality parts of EM.”
The fund also invests in securitized assets, with about 23% of the portfolio is allocated to the sector, as of Jan. 31.

Stock chart icon

Pimco Income Diversified Fund

While the fund has a benchmark, the Bloomberg Global Credit Hedged USD Index, it is “benchmark aware” and doesn’t “hug it,” Pier said.
Morningstar has called the fund a “standout.”
“Pimco Diversified Income’s still ample staffing, deep analytical resources, and proven approach make it a top choice for higher-yielding credit exposure,” Morningstar senior analyst Mike Mulach wrote in January.
It hasn’t always been smooth sailing. The fund has more international holdings and a more credit-risk-heavy profile than its peers, which has sometimes “knocked the portfolio off course,” like it did in 2022 during the Russia-Ukraine conflict, Mulach said. Still, he likes it over the long term.
So far this year, the fund is relatively flat on a total return basis.
In addition to also leading PDIIX, Pier is also a manager on a number of other funds, including the PIMCO Multisector Bond Active ETF (PYLD), which was launched in June 2023. It currently has a 30-day SEC yield of 5.12%, as of Tuesday, and an adjusted expense ratio of 0.55%.

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Multisector Bond Active Exchange-Traded Fund performance since its June 21, 2023 inception.

“It’s maximizing for yield, while looking for capital appreciation, and obviously, with the same Pimco principles of wanting to keep up on the upside, but manage that downside risk,” she said.

Where Pier is bullish

Right now, Pier prefers developed markets over emerging markets and the U.S. over Europe.
Within investment-grade corporate, she likes financials over non-financials. Credit spreads have widened in financials over the concerns about regional banks, she said.
“Maybe some of it’s warranted for the fact that they need to issue significant supply year after year, but we think that the metrics of, say, the big six … look quite resilient on a relative basis,” Pier said.
Within corporate credit, the team looks at the “full flexibility of the toolkit,” she noted. That could include derivatives and cash bonds, she added.
“Are we looking at the euro bond or the dollar bond in the same structure? The front end or the long end? Cash versus derivatives? However we can most efficiently express our view and trade that will lead to the best total return,” Pier said.

She also likes securitized assets, which she said can be a lot more resilient during a downturn. One of Pier’s preferences is the legacy non-agency mortgage-backed securities market.
“We have the data on how long they’ve been in the home, how much home equity has been built, what their mortgage rate is, what’s been their alacrity to pay, so we can see — is there any delinquency?” she said. “We have a lot of data there and a lot of comfort around that asset class.”
Agency mortgage-backed securities are also attractive and could be a good substitution for single-A rated corporate debt, she said.
About 60% of homeowners have a mortgage rate below 4%, according to a Redfin analysis of data from the Federal Housing Finance Agency’s National Mortgage Database.
“It’s more liquid, implicitly guaranteed by the government and it’s a pretty similar spread,” she said.
Pier finds the work exciting and encourages women to join her in the business.
“Anyone can excel who wants to really put in the work and wants to bet on themselves,” she said.

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Target-date funds can take much of the guesswork out of retirement planning. 
But fund holdings are sometimes too conservative for younger investors.
While passively managed target-date funds usually have reasonable pricing, actively managed ones can be expensive.

Westend61 | Westend61 | Getty Images

If you have a 401(k) plan — and about 60 million Americans do — chances are you are invested in a target-date fund. In fact, they are the default option for many plans, helping to explain why they make up nearly a quarter of 401(k) plan assets, according to the Plan Sponsor Council of America.
Of course, target-date funds are not limited to retirement plans. Financial advisors use them and so do many do-it-yourself investors. 

Undoubtedly, such funds can be a handy tool, helping to make retirement planning easier. Yet, they aren’t a cure-all for everyone, with some investors likely finding themselves wanting more.
Here’s what you need to know.

Why target-date funds work for many investors

Target-date funds tend to mature over five-year intervals, such as 2040, 2045 or 2050. The end date approximates when an investor plans to retire. They can take much of the guesswork out of retirement planning, with managers helping to ensure each fund has an age-appropriate mix of stocks and bonds by rebalancing the holdings over time.  
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Besides the simplicity, another potential advantage is the fee structure. Passively managed target-date funds can have expense ratios as low as 0.08%. Admittedly, that’s higher than many exchange-traded funds and mutual funds that track indexes, but less expensive than actively managed options within the same fund family. 

At their best, target-date funds are like a good meal kit service. Many people don’t know how, don’t want to or have the time to cook. So, they rely on a company to send them all the pre-portioned ingredients and directions they need to make a good dish.  
Similarly, savers often have straightforward needs but neither the time nor know-how to construct a portfolio of investments that remain compatible with their risk profile throughout their adult life. For them, target-date funds can be a good option. 
There are, however, some important caveats. 

When target-date funds don’t work so well 

First, target-date holdings are sometimes too conservative for many younger investors. Consider that Vanguard and Fidelity’s version of a 2060 target-date fund is relatively bond-heavy — 9.7% and 13.32%, respectively — given they are intended for investors now in their 20s.
When you’re that young, the diversification benefits of fixed income — lower volatility and more consistent reinvestment rates — are largely theoretical. In reality, fixed income may only mute potential gains.
Secondly, the management approach may be too formulaic for many investors. For one thing, the composition of target-date funds and the reallocations that occur over time suggest the only thing determining an investor’s risk profile is how old they are. Many other factors go into that, including their assets and liabilities.  
The other issue here is diversification. Vanguard’s 2060, 2050 and 2040 target-date funds devote at least 30% of their holdings to international investments, an area of the market that has underperformed U.S. equities for almost a decade and a half. Diversification is good, but diversification just for the sake of it can weigh on performance. 

Finally, while passively managed target-date funds usually have reasonable pricing, actively managed ones can be expensive. For example, the Fidelity Freedom 2060 fund has an expense ratio of 0.75%, even as most planning-based financial advisors can come close to replicating its approach using less costly and potentially better-performing mutual funds and ETFs. 

‘A mixed bag’ for investors

In the end, target-date funds are a mixed bag. For those with somewhat straightforward needs who perhaps don’t have a ton of investible assets nor the inclination to work with a financial advisor full time, they can be an economical way to invest and build wealth.
At the same time, target-date funds have some shortcomings, many of which highlight the value of a financial advisor — ironic given that asset management companies tout target-date funds’ ability to take some of the guesswork out of retirement planning.
Indeed, while no financial advisor can time the market to perfection and lock in outsize gains year after year, they can typically top the formulaic, rigid and somewhat uninspired approach many target-date fund managers tend to take.
— Andrew Graham, founder and managing partner of Jackson Square CapitalDon’t miss these stories from CNBC PRO: More

President Joe Biden called for protecting Social Security and Medicare in last year’s State of the Union.
As the program’s face imminent insolvency dates, experts this year say they hope to see action.

President Joe Biden delivers the State of the Union address to a joint session of Congress on Feb. 7, 2023
Pool | Getty Images

How Democrats propose tackling Social Security’s woes

Rep. John Larson, D-Conn., and other lawmakers discuss the Social Security 2100 Act, which would include increased minimum benefits, on Capitol Hill on Oct. 26, 2021.
Drew Angerer | Getty Images News | Getty Images

That includes Rep. John Larson, D-Conn., who has led a Democratic bill aimed at expanding benefits for the first time in more than 50 years.
His bill — Social Security 2100 Act — would include a 2% across-the-board benefit increase, as well as more generous benefits for low-income seniors, and other enhancements. Those benefit boosts would be paid for by making it so earnings over $400,000 are subject to Social Security payroll taxes. Currently, up to $168,600 in earnings are subject to those levies.
In addition, the bill would also add a 12.4% net investment income tax for taxpayers earning more than $400,000.
Larson’s Social Security proposal currently has almost 200 House co-sponsors, with companion legislation in the Senate. But it has yet to be voted on.

“The fact that there hasn’t been votes on something as critically important to 70 million Americans as Social Security is … why isn’t there a vote?” Larson said in an interview with CNBC at his Washington, D.C., office last week.
It’s a question Larson has faced as he touts his plan at town halls.
“The honest answer is because they did health care,” Larson said, referring to the Affordable Care Act, which was signed into law by President Barack Obama in 2010.
At the time, there was a question as to whether to focus on Social Security instead.
“Did I advocate it? Absolutely. Was I as disappointed as you? Absolutely,” Larson said he recently told a town hall attendee. “But do you give up? Do you just say, ‘Oh well, it can’t be done?'”
To help make his case with fellow Democrats and Republicans across the aisle, Larson hands out copies of Social Security cards to each member with the number of benefit recipients in their district and the total amount of monthly benefits they receive. In Larson’s district, there are around 147,662 beneficiaries, most of whom are retirees, receiving $270 million in monthly benefits.

As the U.S. population hits “peak 65” — with the most Americans in history expected to turn 65 through 2027 — Larson is hoping that will help inspire lawmakers to act.
“The Republicans are going to say we’re raising taxes,” Larson said.
But Larson said the focus instead should be on the size of the benefits that Social Security beneficiaries may receive that they won’t be able to match elsewhere on the private market. “Look at the benefit that they receive for this,” he said.
Another proposal led by Sens. Elizabeth Warren, D-Mass., and Bernie Sanders, I-Vt., similarly aims to make benefits more generous, raise taxes on the wealthy (this time on those earning more than $250,000) and extend Social Security’s solvency. 
The report comes as a Senate report found nearly half of Americans 55 and older have no retirement savings. Meanwhile, 52% of those ages 65 and older are living on less than $30,000 per year.

Why raising payroll taxes may not be enough

Republican Sen. Bill Cassidy of Louisiana speaks to the press on Capitol Hill on Feb. 10, 2021.
Nicholas Kamm | AFP | Getty Images

House Republicans are focusing on other efforts to create a bipartisan fiscal commission that would evaluate Social Security, Medicare and other government spending.
Democrats and advocacy groups representing retirees worry that could lead to detrimental cuts to benefits.
But Republicans and fiscal experts contend there are not a lot of other choices.
“If you wanted to tax people who make over $400,000, you really can’t fill the hole,” Sen. Bill Cassidy, R-La., said during a retirement industry event in Washington, D.C., last week.
Those tax thresholds are going to create such high tax rates that it becomes “self-defeating,” said Cassidy. The Louisiana senator is working on his own “big idea” fix to create a separate investment fund to help remedy Social Security’s shortfall.
Social Security may only pay full benefits until 2034, at which point there may be 23% benefit cuts. That would amount to a $17,400 cut for a typical couple who retires in 2033, according to the Committee for a Responsible Federal Budget.
Social Security is not the only program that may require tax increases. The Medicare hospital insurance trust fund may only pay full benefits until 2031, based on recent projections. Shoring up that program’s finances may require payroll tax increases in addition to those proposed for Social Security.
“You can only raise [taxes] so many times,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget.
Lawmakers should carefully weigh the best use of the country’s resources, she said.
“I probably wouldn’t put pension benefits for people who don’t need them at the top of my list,” MacGuineas said. “At the top of my list, I would put pensions for people who do.”
As voters head to the polls in November, they will be choosing a leader who influences the program’s fate.
AARP plans to continue to put pressure on the candidates by asking each one, “What’s your position on Social Security?” Nancy LeaMond, executive vice president and chief advocacy and engagement officer, said on a recent press call.
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Women and Wealth Events
Your Money

Married couples can choose to file taxes jointly or separately every year.
While the tax code generally favors joint returns, some spouses may benefit from filing apart, experts say.
For 2021, roughly 3.9 million taxpayers chose “married filing separately” and more than 54 million picked “married filing jointly,” according to IRS estimates.

Mapodile | E+ | Getty Images

Married couples have an important choice every year: filing taxes jointly or separately. While the tax code generally favors joint returns, some spouses may benefit from filing apart, experts say.
“Married filing jointly” combines income, credits and deductions on a single return, whereas “married filing separately” creates two returns with individual earnings and tax breaks.

“I would say 99% of the time, it’s better to file a joint return,” said Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida.

More from Women and Wealth:

Here’s a look at more coverage in CNBC’s Women & Wealth special report, where we explore ways women can increase income, save and make the most of opportunities.

For 2021, roughly 3.9 million taxpayers chose “married filing separately” and more than 54 million picked “married filing jointly,” according to IRS estimates.
Generally, married filing jointly is more generous due to wider tax brackets and a bigger standard deduction, Lucas said. For example, the 10% bracket kicks in with $22,000 in taxable income for joint filers, versus only $11,000 for couples filing separately for 2023.
However, there are scenarios when filing separate returns can pay off, he said.

Avoid the ‘phantom tax’ for student loans

Income-driven student loan repayment plans are one reason to consider separate returns, according to Marianela Collado, a CFP and CEO of Tobias Financial Advisors, based in Plantation, Florida. She is also a certified public accountant.

Here’s why: Income-driven student loan payments factor in earnings from your most recent tax return. That means a lower-earning spouse with student debt could see significantly higher monthly loan payments by filing taxes jointly, she said.
With lower earnings and higher student loan balances, this could be particularly important for women.
While you may owe extra taxes by filing separately, you could avoid the “phantom tax” of higher monthly student loan payments, Lucas said.

Maximize itemized deductions

Another reason to file separately could be to maximize itemized deductions, such as the tax break for medical expenses or charitable gifts, Lucas said.
Every year, taxpayers choose the standard deduction or itemized deductions, whichever is greater. For 2023, the standard deduction is $13,850 for filing separately, which is easier to exceed than $27,700 for filing jointly.
However, if one spouse itemizes, the other can’t take the standard deduction, which can increase their tax liability, Lucas warned.

You could be ‘penalized’ for filing separately

While filing separately may offer savings in certain scenarios, there could be other unexpected tax consequences, said Collado.
“You basically get penalized [by the tax code] for filing separately,” she said.
For example, separate filers typically can’t make Roth individual retirement account contributions because the modified adjusted gross income limit is $10,000. 
Plus, you may lose credits such as the tax break for child and dependent care, education and student loan interest, among others.   More

Gold does well when other assets — and the world, are in trouble.
And so even those who join the rally should do so with caution, and root against the yellow metal, experts say.

Andriy Onufriyenko | Moment | Getty Images

One helpful way to think about the recent gold rally: it’s a case of schadenfreude. The yellow metal does well when other assets — and the world — are in trouble.
As a result, prospective buyers should proceed with caution, experts say. Be prepared to root against your investment, said William Bernstein, author of “The Four Pillars of Investing.”

“You buy gold and hope it doesn’t go up,” he said.
Earlier this week, the gold contract for April gained $30.60, or 1.46%, to settle at $2,126.30 per ounce, the highest level dating back to the contract’s creation in 1974. On Wednesday, the metal was trading at $2,158.40.
The safe-haven asset has risen for two consecutive months amid ongoing wars in Ukraine and Gaza, the upcoming presidential election, and uncertainty around interest rates and inflation.
Russian President Vladimir Putin recently warned of nuclear conflict and “the destruction of civilization” if other countries sent group troops into Ukraine. Meanwhile, experts are concerned that Donald Trump would try to pull the U.S. out of NATO if he was reelected, which could raise security risks across the world.
Among the other previous good times for gold: The Great Recession and the start of the Covid outbreak.

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Some Wall Street experts forecast the current rally to continue, anticipating the metal’s value to rise to $2,300 or higher over the next 12 to 16 months.
Should investors take part in the doomsday holding? Here’s what financial experts said.

Gold returns over time are paltry, experts say

Despite brief rallies, the average annual returns for gold far lag stocks and bonds, according to experts.
“When things get volatile, [investors] believe their money will be better positioned there,” said Doug Boneparth, a certified financial planner and the founder and president of Bone Fide Wealth in New York. He is also a member of CNBC’s Advisor Council.
But, Boneparth said, “Gold hasn’t always been the store of value people hoped it would be.”
Indeed, over the last century, gold has risen around just 1% a year, on average.
A $10,000 investment in the S&P 500 on March 5, 2014 — a decade ago — would be worth around $32,700 today. Over that same time frame, an equivalent investment in gold would have only grown to roughly $14,700, according to data provided by Morningstar Direct.

Meanwhile, the gold exchange-traded funds SPDR Gold Shares and iShares Gold Trust produced an average annual return of close to 4% since 2014, compared with around 13% by the S&P 500, Morningstar Direct found.
As a result, Boneparth said, “Gold isn’t really a part of our client portfolios.”

Think of gold as insurance

In some ways, investors should think of buying gold the way they might home insurance, Bernstein said.
The yellow metal typically does well when other financial assets are in the red, and especially when people are losing faith in banks and money.

“When everything else is going down the tubes, gold is the one thing that’s likely going to do well,” he said. “Home insurance also has a high return when you have a fire.”
And just as you pay for the protection of home insurance, you pay a cost for owning gold, he said: those paltry returns in normal times.
Still, some investors may decide to allocate a small portion of their portfolio to gold — experts recommend keeping it under 5% — as insurance against an economic catastrophe, Bernstein said.
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