Is Purchasing Gold a Good Investment?

Historically, gold has played a potential role in the economy of a number of countries. Gone were those days, when it was considered as the primary form of currency, things have changed as the years progressed and civilizations developed. However, until today still, the yellow metal is considered as a long term investment and perhaps a great portfolio addition in the bear market.

Nevertheless investing in commodities like gold or oil aren’t an easy job unlike other forms of investments like stocks or bonds. One of the primary reason for this, stocks and bonds are easily transferrable and can be accessed instantaneously however this is not the case with the former. But, still gold is easily accessible to the average individual in the form of jewelry or ornaments, in fact, you can even purchase bullion from a dealer or a bank.

Let us discuss some of the vital reasons why you need to invest in this expensive metal

Reasons To Invest In Gold

Solid gold, silver and platinum are excellent investments.  However buying jewelry is not regarded as a great investment especially when you buy ornaments with stones, it doesn’t have value when you exchange or replace with other ornaments. Yet, the solid metals can be sold at the market value.

Investors buy gold due to a few specific reasons like the safe haven, direct investment or a hedge. There is a common perception that gold is highly liquid yet a scarce asset which is no one’s liability. Though it is a luxurious goods yet it is one of the best investment, therefore, it plays a vital role in the investment portfolio.

Why you need to invest in gold. Here are the reasons

  • Gold is another popular inflation hedge against the stock crash market. They are effective as against inflation as against deflation.  As a matter of fact, the purchasing power is higher during the deflation period than the inflation period. Rising purchases by China and other emerging markets have driven the price of the gold high up in the bear market.  The experience during the last 50 years suggests gold performs better compared to any other commodities.
  • Gold is safe haven asset which can shine even during inflation and deflation periods. Perhaps, for centuries it is the leading haven because the investors go for gold during inflation times causing the price to increase more in the global markets. Similarly, it also goes higher during deflation. It protects the investors during a possible catastrophe. This is one of the main reasons why many investors want to accumulate gold. Since investors have started accruing gold, the gold prices started to skyrocket and went from $869.75 (2008) to record high of $1,895 (2011)
  • Solid gold comes in various versions such as coins, bullions, medals but still, they are scarce and finite. This is one of the crucial factors why they are valued so much. In addition, there are only fewer gold mines. Moreover, the exploration budget is continuously plummeted due to the rising mining costs. The gold which can be easily mined is mined already. So there is always an increased demand for this precious yellow metal.

Most of the families treasure gold as an asset and is carried over through generations.  Gold bullions offer distinct advantages that you cannot find in any other investment. There are many big advantages of investing in gold

Advantages Of Investing In Gold

  • Gold is superior to currency. Although it is not conventional form of money, yet it serves as a long-term store for value.
  • Gold is perhaps an easy and accessible way to diversify your portfolio
  • Gold bullion doesn’t require any paper contract or counter party to fulfill a contractual obligation.
  • Gold can never go zero and always have value
  • Gold is easy to accumulate and the maintenance of this metal is fairly easy and not unlike other commodities.
  • Like bond or stocks, you don’t require knowledge to invest in gold. Moreover, you need not keep monitoring the market crashes. No special training, knowledge is needed to buy gold bullion.

Conclusion

To summarize, gold offers massive profit potential in the current economic systems. You can subscribe and easily redeem whenever you need.