Why to Invest in Gold

Why to Invest in Gold

Gold has been respected and known over the years and around the world as an asset with high market value retention and rich history. This has made gold a favorite in every investor’s portfolio.

Gold has (and still can) be used in portfolios to protect global purchasing power, help reduce the volatility of portfolios and also minimize losses during market shock.

Why is Gold this Important?

You see, gold was once used for money; it was actually the first form of money, and subsequently, it has become the base for the gold standard which sets the value for all money.

This has kept the standard and ever increasing value of gold at a ridiculous pace.

Now, if gold is this powerful, why should you invest in it?

  1. Gold has the ability to hold its value over time.

Gold, unlike paper currencies, oil, and other assets that are known to constantly fluctuate, has a history of maintaining it’s value over the years. This is because people see gold as a way to pass their wealth from one generation to the other.

  1. Excellent hedge against inflation

As inflation rises, every dollar you own buys a smaller percentage of a good or service, but for Gold, it rises as inflation rises. Gold has an excellent hedge against inflation and would be another reason you should consider investing in it.

  1. Increasing Demand

Gold has a very strong cultural value in countries like India and China. As such, the demand is constantly increasing, especially during festive seasons in those countries. Imagine selling your gold at an all-time high? Yes, you make a lot of gain.

  1. Portfolio Diversification

If you must diversify, you should be able to find investments that are not closely related to one another. This is why investing in Gold is very important as it constantly has a negative correlation with stocks and other financial instruments.

  1. Deflation does not affect gold

During deflation, business activities slow down as prices decreases and the economy is in a huge debt. Not for gold; in fact, while every other thing decreases, gold soars. Isn’t that amazing?

  1. Gold can be used to store wealth

This has been in practice for generations now and it’s not going away any time soon. While paper currencies fall in value every year, gold keeps increasing in value. So think of saving gold as opposed to saving paper money. Yes, you get the idea.

In conclusion

Gold has maintained its value and somehow been immune to inflation, deflation, and other economic crisis. The cultural value of gold in some countries like India and China is on the rise and will not slow down anytime soon. This makes gold an important part of a diversified portfolio, and the most reason why you should invest in it now.

For more advice on the business of gold, we have over two decades of experience. Kindly use our Contact Us Page and we will get back in touch.