Why should you invest in Gold good question?
Gold is a valuable and sought-after metal. If you’re considering investing in it, here are some reasons why you should.
1) Gold Is A Great Hedge Against Inflation And Financial Instability
Investing in gold can be an excellent way to diversify your investment portfolio and hedge against the effects of inflation and financial instability. This has been proven time and again during major economic crises such as the banking crisis of 2008. When the banks were failing, people started pulling their money out of the banks and into tangible assets like gold for security. Now that we’ve entered a time when more global economies than ever before are struggling financially, buying gold once again makes sense as a safety net for your investments. If you want to learn more about how inflation and financial instability affects the prices of gold and silver, take a look at this article:
2) The Price Of Gold Rises During Times Of Uncertainty
When the world is experiencing times of political, economic or social turmoil such as wars and revolutions, stock markets usually fare badly. However, because the supply and demand for gold are fairly constant regardless of events that affect other investment classes, it tends to grow in price during these times. This makes it an ideal asset to hold when there’s uncertainty in other areas of your life. For example, if you own physical gold jewellery or coins then you will know that they don’t lose their value so easily even when you need cash quickly. This can be a life-saver in times of need, so buy gold to protect your savings.
3) Gold Has A Very Low Correlation With Other Assets
In other words, when other investments such as shares and real estate perform badly, the price of gold tends to increase. When they do well, it doesn’t necessarily mean that the price of gold will fall; it is very stable. This makes it less risky than other assets (although not completely risk-free).
4) Gold Is The Best Performing Asset Class Of The Last 10 Years
If you had bought 100oz of gold ten years ago then today it would be worth $248,000. That’s right – an investment of only 2400 in 2006 would now be worth more than $150,000 more. This massive gain has seen huge numbers of people buying gold as a sensible investment as the financial markets continue to be unstable and unpredictable.
5) Gold is Easy To Store And Is Divisible
Gold doesn’t need special storage like other assets such as property or classic cars; you can store it easily yourself which is what makes it such an attractive investment for those who aren’t wealthy enough to invest in larger items. For example, thousands of people store their gold with Cash4Junk.com – we will come and pick up your scrap or unwanted items and pay you cash on the spot! Not only that but we will pay top prices for your gold jewellery, coins and trinkets so you can sell your gold and use the money to buy something you really want.
6) Gold Is Very Liquid
This means that when you come to sell it, it’s very easy to find a buyer. This means that the price is very stable; in other words, if someone comes along and wants to buy your gold today then they will pay roughly the same amount as someone who wants to make a purchase tomorrow. Other assets such as property take much longer before they can be sold and may not all sell at their full price, whereas with gold there is no such risk. Because of this higher liquidity, investing in gold (and therefore owning physical gold in particular) offers people protection against inflation and financial instability because it’s easier than ever before to convert it into cash.
7) Gold Can Be Used To Hedge Against Inflation
Gold is often referred to as ‘The Traders Safe Haven’ because it tends to move in the opposite direction of equities (shares), bonds and currencies during times of inflation. As gold moves inversely with these assets, buying it can help protect your money against inflation; this has led many people to suspect that there’s a strong correlation between gold prices and economic growth – for example, when Greece experienced problems with their economy in 2010, the price of gold increased by 30% over just 10 weeks.
8) Gold Has No Yields Because It’s A Commodity And Not A Fixed Investment
Because no one is guaranteeing you any fixed return on your investment, many people find gold is a more attractive option than other investments such as fixed-interest bonds and gilts. This is because these bonds will generally pay out a set amount of interest which is unlikely to exceed inflation (thus eroding your money’s value) whereas gold remains valuable eternally due to its use in jewellery and part as an industrial commodity.
9) Gold Has A Lot Of Commercial And Industrial Applications
This means that if the price of gold increases significantly, mining companies will pay more for it which means they can buy more machinery and equipment (such as drills) to explore new mines. Some people even say that the increase in demand for this metal could be one reason why supply shortages are becoming commonplace, so if you want to invest in gold then now is the time!
10) It Is The Best Preserver Of Wealth That You Can Own
Because it has been prized for centuries as a precious metal, throughout history gold has retained its value. This means that if you are looking for something that will last forever and grow your wealth at the same time then physical gold is an incredible asset to own. We all know-how over the centuries markets have collapsed and money has become virtually worthless – yet gold still retains its worth today so it’s likely to remain valuable in future too.
11) Gold Has Very Few Negative Effects
Many people think of investments such as oil or gas which can be harmful during production, but many forms of mining needed for other metals such as copper and nickel also have high environmental costs. Gold is rare because it’s formed deep in the earth’s crust (and often in inhospitable conditions) but once mined, the only negative effect it has on people is if mercury or cyanide are used in its production – both of which can be safely managed.
12) The Price Of Gold Is Likely To rising In The Future
This may well happen due to a number of reasons including inflation and perhaps even in response to a global financial crisis; therefore if you want to invest your money somewhere then gold seems like an ideal place given that it has historically been highly valued throughout history and across many different cultures.
13) Gold Has A Low Correlation With Other Assets Such As Stocks And Shares
This means that if other investments are struggling, gold normally offers good returns – it’s often referred to as a ‘wealth insurance’ because should other markets suffer then the price of gold is likely to rise even more than usual. This makes it an excellent hedging tool for financial advisors who design portfolios for wealthy clients looking for stable investments.
14) Gold Is A Physical Commodity Which Can’t Be Counterfeited Or Stolen
Unlike paper currencies or stocks which can be printed any time, there’s only so much physical gold that exists in the world; this lack of inflation also helps to make many people feel safe about their savings and investments knowing they can’t be devalued by governments printing money (although the 2008 financial crisis showed that even this isn’t safe!)
15) You Can Invest In Gold Online Easily And At a Low Cost
You can choose to invest in gold via vehicles such as ETFs (exchange-traded funds) which are very liquid, or through physical bullion which typically incurs a lower cost to acquire given that storage fees are normally low. Many people do worry that using traditional forms of investment such as ETFs could mean they’re not taking ownership over the metal itself, but other forms of physical gold investing incur huge premiums for small quantities so it’s up to you how you want to buy gold and how much you might be willing to pay for storage/security.
16) Gold Is Easy To Sell At Any Time Of The Day Or Week
If you’re looking to enter or exit a gold position quickly, this metal is traded electronically 24 hours a day so it’s easy to buy and sell whenever you want. In addition, there are always buyers out there which means that if you do decide to sell your holdings then the price of gold should go up soon after so it really allows for flexible trading.
17) Many Countries Now Own A Lot Of Gold
Japan recently revealed that they have been buying gold every year since 2009 and now own around 7% of all the gold ever mined in history, a stark contrast from 80 years ago when they only owned 1% of the available stocks. With countries such as China also feeling nervous about their currency reserves (and indeed other foreign investments) then it’s likely that gold is well-placed to continue rising in price for many years to come.
18) Gold Can Help Hedge Against Inflation And Financial Instability
In the past, when the world has been faced with financial instability such as during the 2007/2008 financial crisis or in times before when all currencies were backed by gold (e.g. the Gold Standard), we saw a rise in demand for gold and therefore this suggests that there could be a lot of potential buying if history repeats itself once again.
19) Gold Has Few Storage Costs
Many traditional forms of investment such as cash savings or commodities like oil require storage costs which can decrease your returns, but because many people choose to hold their physical gold as bars or coins then as long as you can keep your metal safe at home (or in a bank vault) it shouldn’t cost anything to hold onto.
20) Gold Is A Practical Investment Which Can Be Held In Many Different Ways
Unlike fine art which is often difficult to value and sell for a good price, gold can be held in physical form, through ETFs or through mining companies. This means that it’s easy to diversify your portfolio into this precious metal without too many problems – you might even find it’s easier than buying stocks!
21) You Never Need To Pay VAT On Purchases Of Gold Bullion In The UK
Many other investments such as art and vintage cars attract tax when they’re sold, but because the government has decided to exempt gold from VAT it means that you can invest in this metal without feeling like you’re being further taxed on it.
22) Gold Prices Are Not Affected By The Media
You might know that main media outlets such as the BBC and CNN only use a few key business stories for their bulletins each day; if we were to analyse these closely we could see that they often focus on the same companies or share prices but one thing which is rarely mentioned is how much gold is worth at any given time. If anything, because news networks seem to follow “fashionable” investments (e.g. Apple, Starbucks or even Bitcoin!) then it’s likely that these would have an impact on consumer sentiment towards other investments – but gold was always seen as a constant throughout history so it’s likely there will be no radical changes in the way it’s perceived by the public.
23) Gold Can Protect You Against Currencies Which May Lose Their Value
If you are worried about your local currency losing its value due to inflation or economic instability then gold might offer some shelter against this because if people all around the world buy more of this precious metal then we could see a rise in demand and therefore prices would also go up. Of course, some currencies may future proof themselves by linking their price to something like gold (e.g. Bitcoin and other cryptocurrencies) so perhaps you should look into that too!
24) Gold Is Relevant In Many Different Situations
Many other investments like fine art or vintage cars can only be sold in certain circumstances (e.g. you might need to fly around the world with the painting, whereas the car needs to pass an MOT test before it can be driven on UK roads) but gold is relevant in pretty much any situation so it’s likely that your investment would always have some value – whether you want to sell it straight away or not!
25) You Can Invest In Gold Directly Or Through An Investment Fund
As well as buying physical gold, many people choose to invest in this metal in different ways such as through stock market ETFs or even mining companies because these allow smaller investors like you and me to buy into this precious metal without having to spend thousands of pounds at a time.
26) Gold Is Usually Independent Of Other Market Forces
Gold is sometimes seen as a commodity and therefore it can be influenced by things like global oil prices, but because many people see gold itself as an investment then it’s likely that its price will become more stable than commodities in the long run. This means that if you invest in gold today you’ll probably be able to hold onto your metal for much longer than other assets – which might give you a better return on your money!