Should you buy gold? Is it actually a good investment? The answer to both these questions is yes, but you’ll want to know what the top advantages of gold. They include:
1. Hedge Against Inflation
Inflation carries a lot of risks, with one of them being it can destroy certain types of investments. High inflation rates can cause cash to lose its value as time goes by. This is why you shouldn’t have investments in cash. Your money will only depreciate in value if inflation rates rise, which they often do.
Gold is a good investment because it has a proven track record of outperforming inflation. Throughout the years more and more people have been investing in gold because it serves as a hedge against inflation.
One of the best things about gold is stock market dips and peaks don’t affect it. Gold’s value does fluctuate, but not in the same way as stocks, bonds and other types of investments. Since this is the case, it’s wise to diversify your investment portfolio by purchasing gold.
If you invest in various assets, such as stocks and real estate, then there’s always a chance that there will be major fluctuations based on market conditions. By diversifying your portfolio with gold investments, your portfolio might not take that much of a hit if your stocks and real estate loses value.
High liquidity is another reason you should buy gold. Gold is extremely easy to convert into cash, and it’s constantly in demand. When the time comes, you should have no problems selling your gold.
High liquidity assets are important part of an investment portfolio. This is because if an investors encounters an emergency and needs cash fast, then they can do so by liquidating their gold investments.
4. It’s A Tangible Asset
Gold can be a tangible asset. If you purchase physical gold, then you have an asset that cannot be destroyed by things such as water or fire. Gold is also easy to maintain, so even if many years have gone by, your gold will still retain its appearance and condition. That is as long as you take good care of it and store it properly.
It’s worth pointing out that gold cannot be erased or hacked. Bank accounts, stock brokerage accounts, credit card accounts and so forth can all be hacked and/or compromised. Physical gold is a tangible asset and is not subjected to many of the risks associated with such accounts.
5. Privacy & Confidentially
Believe it or not, but gold offers both privacy and confidentially. Although you still have to report gains on it, gold is still very anonymous. Whether you physically hold the gold yourself or you have a custodian hold onto it for you, gold is private and confidential. Not many other assets offer this.
6. Decent Returns
Gold can result in decent returns in the long-term. As history has proven, gold tends to do very well as time goes by, even in economical turmoil or turbulent times. This is one of the reasons why more and more people are investing in gold as part of their retirement plan.
7. No Counterparty Risk
Finally, there is no counterparty risk with gold. Physical gold will never go completely broke, nor can it go bankrupt. If you have investments in a specific company and it goes bankrupt, then your portfolio can take a huge dive and you won’t walkaway with much, if anything at all. Furthermore, physical gold doesn’t default on obligations or promises.
Gold offers many other advantages, but the above are the top ones. If you’re serious about owning gold, then make sure you buy it from a reputable seller and store it with a reputable custodian, if you decide not to store it yourself.