Investing in Gold…Is It Worth It?

August 28, 2019

Gold is viewed as a safe and reliable investment vehicle. Throughout history, it has been seen as a valuable commodity – something that people fall back on when other currencies are not accepted. Why do you think people from centuries ago travel far and wide to buy gold?

Gold jewelry, for example, can be excellent investments because they appreciate in value over time. You can resell them for a much higher price in the future to get a good return on investment.

Gold can also be a good form of asset that can be handed down for generations. Provided that you know which gold investment to make, you can be assured of substantial returns.

There are several ways to invest in gold. There are gold bars, coins, ingots, and ETF’s, to name a few. Before choosing which one to put your hard-earned money in, you need to make the necessary considerations to be able to get the highest return in the future.

Why you should invest in gold

Despite opposition from many financial experts, no one can deny that gold does make an excellent investment vehicle.

  1. Diversify your portfolio.

If you have investments in bonds and stocks, another way to diversify your portfolio and mitigate the risks is to include gold. This is because the best way to diversify is to find investments vehicles that are not closely correlated. In fact, seasoned investors combine gold with bonds, stocks, and other investments to reduce risk and volatility.

  1. Gold has held its value throughout the years.

Unlike coins, paper currency, and other assets, gold has held its value since time immemorial. This is true since ancient times. People have always seen gold as a great way to pass on their wealth from one generation to the next.

Whenever the value of the US Dollar drops, a lot of people tend to turn to gold because of the security it offers. This makes the price of gold rise. Between 1998 and 2008, the price of gold has reached a whopping $1,000 per ounce and nearly doubled in the following years.

  1. Inflation hedge.

When the cost of living rises, gold’s value will increase, too. This makes this investment commodity a good hedge for inflation. While inflation erodes the power of a dollar, gold can hedge against that loss. This means that the price of gold moves to the opposite direction the dollar’s value does. So to avoid losing out to inflation, you should definitely consider investing in gold.

  1. Protection against deflation.

In 2008, while the rest of the world was suffering from deflation, wherein prices decreased and economies failed, the spending power of gold rose. This was due to the fact that a lot of people chose to hoard cash through the form of gold bullions or coins.

  1. Always in demand.

In recent years, the gold market has enjoyed an increase in demand. Yet gold has always been in demand. It has been intertwined with culture. In India, one of the biggest consumers of gold, for example, gold is used many ways, including jewelry and gold bars as a traditional form of saving money.

Nowadays, many investors are beginning to acknowledge gold as a viable investment class.

How to buy gold

Precious metals, like gold, make for a fantastic investment. Being able to get your hands-on physical assets, like gold, gives you some sense of security that no other commodity can offer.

  1. Choose the right dealer.

There are local dealers that you can purchase gold from. Gold coins, in particular, are easier to source near you. There are lots of shops that sell gold coins, which can be handy during emergencies where more funds are needed.

You can also buy from online sellers. With just a few clicks of the mouse, you’ll be able to buy gold in no time. Aside from that, you can also buy any time of the day, wherever you are in the world. Delivery will be quick and hassle-free since you don’t have to travel anywhere to buy gold. Plus, they offer lower prices than physical shops since they don’t have to pay overhead costs.

  1. Choose the kind of gold you want.

Are you looking to buy gold jewelry, bullion, or coins? How about gold futures or gold ETF (Exchange-Traded Fund)? Each option has its own purchasing processes, so it’s important that you do a bit of research for each one to save time.

  1. Decide on how to store it.

A lot of people are storing gold in safety deposit boxes or home safes. Keeping your gold is crucial to prevent it from being stolen. But you should also take into consideration the time when you’ll be needing to sell your asset. If you’re planning to sell it in the future, you should consider the ease and convenience of doing so, which means that the storage is an essential factor to look into.

Bottom line

Investing in gold requires careful consideration of the options and deciding what’s right for you. Whichever option you choose, there is perhaps no better way to diversify and protect your assets from these turbulent times.

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Due primarily to the California Gold Rush, San Francisco’s population exploded from 1,000 to 100,000 in only two years.

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