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12 reasons why you should own gold
1. Gold is a safe investment
Throughout history, gold has been viewed as a safe investment, especially during a market downturn. This is usually the case because during such times the value of gold goes up while other assets go down.
However, some investors usually think this is a fairly risky investment, especially when the market is doing well. Even so, gold is still seen as a safe choice if you want to protect your money as the economy shrinks.
This relationship is well illustrated in today’s economy – the price of gold rose to over $ 2000.
2. Gold provides better short-term returns compared to other investments
While assets like the Dow Jones Industrial Average (DJIA) outperform gold over the long term, gold has the edge in the short term. This is best illustrated by the fact that the price of gold has risen 278% in 15 years while that of the DJIA has risen only 173%.
This is in sharp contrast to the 839% increase in the DJIA compared to the 280% increase in the price of gold over 30 years. Hence, it is evident that gold is an excellent short-term investment.
3. The gold price continues to rise
While gold is often viewed as a hedge against inflation, it is also a salable asset that is exposed to market forces that either rise or fall in value.
During the 2008 financial crisis, the value of gold declined 31% due to credit restrictions caused by its sale in favor of cash, thereby decreasing its value.
However, that changed in 2019, even before the world was hit by the coronavirus pandemic that crashed stock markets around the world. This was evidenced by the value of gold, which rose from $ 1,250 in May to around $ 1,750 an ounce, an increase of 40% in less than a year.
4th Gold is highly fluid and portable
One of the best things about gold is that it is very fluid. Hence, by selling it through an online dealer, at a private party, at a pawn shop, or at a local coin store, you can liquidate it much faster than other physical assets like real estate. This process usually takes three working days for the money to be transferred to your account. This is still much faster than selling stocks through a brokerage dealer.
The amount paid when selling physical gold usually depends on factors including the denomination, purity of the gold, market price, and various other factors.
Another attractive aspect of gold is that you can take it with you in different countries.
5. Gold is an excellent hedge against inflation
Whenever you want to make a long-term investment decision, you should always consider inflation. This is the rate at which money depreciates in value over the years. Hence, it is best not to make your investments in the form of money as it will depreciate in value over time, especially in developing countries.
However, after investing in gold, you no longer have to worry about inflation as it is more stable. This is a great way to protect your investment.
Because of this, many investors around the world choose gold because it can minimize risk. However, you need to do a careful analysis of market conditions and prevailing prices before deciding whether to invest in gold. This allows you to study market fluctuations and be better able to make an informed investment decision.
6th Portfolio diversification
Gold shows no significant statistical correlation with the common asset classes. It is also argued that because of its low to negative correlation with many major asset classes, gold is the ideal asset that many investors have chosen to diversify their portfolios.
In fact, there is evidence that gold and stocks have a negative correlation. This means that the value of gold increases when the stock price decreases.
In addition, the price of gold is not affected by the market volatilities caused by microeconomic and macroeconomic factors that affect many of the assets. This is a great way to protect your investment portfolio. If you want to be less prone to market volatility or want to reduce risk, gold should be your first choice.
7th Gold has no counterparty risk
A unique feature of the gold bullion is that you do not need any other party or intermediary to perform the contractual obligation.
In addition, no paper contract is required to complete it. This is due to gold’s unique property of being the only financial asset that is not liable to any other party. This means that in the event of a market crash or crisis, gold is the most sought-after asset.
Therefore there is no better one financially Having an asset when there are unforeseen downturns in the economy or your country.
8th. The weakness of the US dollar
There is no doubt that the US dollar is one of the most important reserve currencies in the world. Whenever the dollar depreciates, people usually switch to gold as it is a more stable financial asset.
This will consequently lead to an increase in the US dollar supply of money in the economy, trade deficits, and a sizeable budget.
During such times, the value of gold still remains strong and stable, which makes it the ideal investment move you should take.
9. Gold is a great way to save for the future
Do you want to save money for the future? In this case, gold is also an excellent option as it guarantees you stable and positive returns in the future. In addition, unlike real estate, gold is easier to invest in because you can start with smaller amounts with your small savings.
When buying gold coins, it is best to buy them from banks as the quality is guaranteed. However, the price of these gold coins is slightly higher than the market value because you will receive a certificate proving their legitimacy that you will not receive after buying gold directly from the market.
Whenever you decide to buy gold from the local sellers, always check their reputations and the rate at which other dealers are selling their gold.
10. Gold is an excellent alternative to real estate and stock market investments
Long-term investment in real estate and stock money will bring significant returns. However, it is advisable not to use all of your savings on these investments as they come at a higher risk.
One of the best investment alternatives You should take into account that gold remains fairly stable over time. Aside from physical gold being a great way to save for the future, it can also be used as jewelry.
So it would be best if you had some gold reserves as their value is relatively constant over the long term compared to the real estate and stock markets so that you don’t lose your money.
11. Gold is a tangible asset
Almost everything in the world today is digital, including payment services like credit cards, bank accounts, and brokerage accounts. This means your assets can be easily deleted or hacked.
However, since it is a tangible asset, there is no need to worry about gold. Hence, even if the internet crashes, you will still have possession of your gold which means the good of your life is protected.
In addition to gold as a tangible asset, it cannot be destroyed by time, water, or fire. There is also no need to receive, fertilize, or feed physical gold, a challenge you may encounter when you own certain goods.
Since gold deposits are limited, gold has a certain intrinsic value that cannot be found in other commodities.
12th No special knowledge is required to own gold
Unlike other objects like baseball cards, diamonds, antique furniture, and paintings, you don’t need any special equipment, training, or skills to identify gold bars. Even so, it’s best not to buy rare gold coins from collectors. Instead, invest in gold bars.
This is because you are investing in gold to protect yourself from decreased purchasing power in the event of a crisis and not selling the gold coins at a later date at a premium. It’s also pretty easy to buy gold bars, even if you are new to gold investing.
Best ways to buy gold
After reading the benefits of owning gold, it is important to understand how best to buy this asset. If you know the appropriate methods for buying gold, you will not be easily scammed or tricked into buying substandard or counterfeit gold.
Some of the best options available are:
- Gold futures
- gold bar
- EFTs that own gold
- EFTs that own mining stocks
- Mining stocks
Gold is a tangible and valuable asset that everyone should look out for, especially when looking to diversify their investment portfolio.
If you were skeptical about whether or not it was necessary, reading this article will have provided you with some insight into why investing in gold is important.