While the track record of this precious metal in the long term does not demonstrate a significant movement at all, its price in recent years has experienced a dramatic increase. In the last decade, the value of gold has increased to almost 400%. Gold provides an avenue for portfolio diversification and can give financial security in times of crisis.
The reason why the two questions above are more important is that in the world of business and investing, knowledge and purpose are more valuable than money. The need to always invest in diverse businesses and ventures cannot be overemphasized. Whilst some can wake up to the inspiration of what and where they need to invest, others might find it pretty challenging to decide on the type of investment they should invest in. On the other hand, some people undertake thorough research on a variety of choices before determining which to dabble into.
What do you know about gold? and Why do you want to invest in gold?
One commodity that has continued to gain investors over the years is Gold. However; this is not to say that some experts wouldn’t continue to discourage one from dabbling in this venture. It is very expedient that you are informed about the advantages of an investment before venturing into one. So as you read on, this might be a very good avenue to draw a thorough conclusion on whether gold is a good investment or not.
If the purpose for buying gold is for its store value – that is, it can be stored and reclaimed at some other time; then it would be helpful to note that it is only as valuable as the amount someone would willingly pay at any given time. Though gold is a substance considered to be of value almost anywhere in the world and can be liquidated easily, buying gold for its store value is not at all recommended to small investors for the sole reason that it doesn’t create cash flow.
If on the other hand, your primary purpose of buying gold is to make a profit because of its current outstanding price, then it would be like gambling. Holding on to the promise that it will be bought for a higher price at some later time is not sound investment advice or strategy. There is no way to measure the value of gold. The rate of gold is primarily dictated by its buyers and sellers. Buying gold in the form of bullion bars and coins can provide stability in times of inflation and other economic crises.
As much as possible, I will advise you as a beginner to invest with the thought of creating cash flow from your gold investment. ETFs and gold mining shares are examples of gold investment opportunities that can actually create cash flows in much the same respect as stocks and bonds investment.
Understanding the Risks of Gold Investments
An investor contemplating if gold is a good investment needs to understand the risks associated with it. First of all, gold investments should never be treated like stocks, bonds, or mutual funds. Trading gold to create upswings in the market can cause financial instability. Again, investing in gold is like investing in currency, it doesn’t build value.
Secondly, the purchasing power of gold can lose its ground at times. The value of gold is not guaranteed to increase or to stay put at its current value at any time. Thirdly, investing in gold more than what is necessary can put an investor’s financial future in jeopardy. The value of gold may drop rapidly in a short period, especially now that gold prices are currently at record highs. Over-investing is never wise, be it in gold or other types of investments.
So, is gold a good investment? Well, it really depends on the knowledge base, purpose of the investment, and net worth of the investor. Investing in gold for its store value is recommended for high-net-worth investors.
Gold investment for its store value can provide financial security when an inflation crisis affects the economy. It can also protect investors from losing their wealth in such a crisis. Here are other good reasons and information that you must arm yourself with on why you must invest in the gold business
1. Investing In Gold Means Immunity against Economic Disaster
You might want to wonder how this plays out, but the truth is that gold does help you against some deadly financial mistakes. When the economic meltdown started from the west, in no time at all the effect trickled down to other parts of the world. This is no wonder they say the world is indeed a small one.
1. Investing In Gold Means Immunity against Economic Disaster
You might want to wonder how this plays out, but the truth is that gold does help you against some deadly financial mistakes. When the economic meltdown started from the west, in no time at all the effect trickled down to other parts of the world. This is no wonder they say the world is indeed a small one.
Once such an economic disaster happens to a country, one of the factors affected is usually the currency which becomes devalued from inflation as the global banking structure caves in. This means that when you make the mistake of tying all your wealth down in cash, then you might find that in no time your net worth plummets. Therefore, one great way to create immunity against this is the investment in gold. So that when the value of currency deteriorates, the gold consistently rises.
2. Expansion of Investment Portfolio
Experts have always advised on the need not to put all your eggs in one basket. Whilst some know the importance of having a diversified investment portfolio, others prefer to stick with only investing in shares and stocks. What then happens when there is an economic disaster? When there is a disaster economically, it affects the shares and stocks and by extension the currency.
However, if you ensure that you have a significant amount in the gold bullion investment, then you can surely guard yourself against a deadly blow. This is because there is usually a very tight percentage of the price of gold going higher, as the stock market deteriorates. For that reason, it pays to invest in gold as well as other financial instruments wisely.
3. Great Investment field Because of its ability to be scarce
Investors who have experienced a boom in the gold venture know how important it is not to joke with such an investment as gold. From time immemorial till now; there has always been the demand for gold. This demand might not be so readily met within a short space of time because gold isn’t manufactured, but mined.
Therefore, over the years experts have come to realize that the demand for gold might not plummet but rather would be on the increase because of its demand from nations whose thirst for gold is on the increase. Therefore, you can be sure that as the demand for it increases, the price definitely would follow suit thereby giving investors adequate returns on their investments.
4. The Investment in Gold Has Long Term Potential
The potential involved in the gold venture far outweighs its demerits. When investing in gold by buying it for the sole purpose of selling it in the future, you might want to agree that it is of great importance because gold in the long term goes upwards.
The price of gold in the short or medium term can fluctuate, but when stored for the purpose of long term, you can be sure that it would appreciate. With gold investment, you can be confident to boycott the kind of risk involved when you invest in shares and stocks. However, with gold bullion, there is the assurance of great profit in the long run even if there might be a fluctuation in the short to medium-term
5. Gold is so easy to procure
The good news is that trading and buying of gold has gone virtual. With the advent of diverse online businesses and investments, the purchase of gold isn’t something that might cause too much stress. There are plenty of dealers who are online willing to either buy or sell gold. This could be in the form of bullion in gold coins or gold bars. This process is a hassle-free one that you could get over and done with within a short space of time. These dealers also offer delivery methods so you can be sure to have your commodity at your doorstep after you have agreed on a price.
There are many more reasons why venturing into the gold business is a great bargain. There are a thousand and one people who have gone this way and have had only success stories to tell, whilst on the other hand some have also tried it out and got their fingers badly burnt. You might want to say that this is a clear case of what might work for one might not readily work for another! Therefore, it is still very expedient that you ask experts or even mentors in this field to help get you informed as well as bring you up to speed with how investing in gold works.
Do not forget the place of research as discussed in the first paragraph. Doing this would to a very large extent help you get knowledgeable, as well as know the best ways to take in the gold business. By and large, investing in gold by all standards is one great way to become rich.
