Regardless if you are an investor, businessman, or some ordinary person, investing in gold is something that you have to consider. And there’s a lot of reasons why it has to be done.
Right now, you already have to set your sights to the future. If you indeed care to your assets and resources, establishing the appropriate financial security plan is quite necessary.
Some people would have their money be stored in banks and wait for the small interests to kick in. Although there is nothing wrong with it, engaging on something that only yields an insignificant profit.
On the other hand, investing in gold will tell a different story. It will allow you to increase the leverage of your assets by taking advantage of the fiat currencies. Over time, you can have this investment secure your wealth.
If you just dig deeper, you will discover that most large companies and investors have been hoarding gold extensively. Do they regret this? Absolutely not. One thing that you remember is that the value of gold grows over the years. For instance, a thousand buck bullion today can cost triple in the next year.
Of course, these are not just the reason why having a gold investment is a brilliant idea, there are a few more great reasons which I’ll go into now.
Why Invest In Gold?
#1) Dollar Weakness
We are all aware that the U.S. dollar is considered as one of the most important reserve currencies. However, this doesn’t mean that the currency is stable.
There are records where its value had fallen compared to other world currencies. You can take the incidents of 1998 and 2008 as an example.
When the value of the U.S. dollar subsidies, it usually triggers investors to get gold as a means of security. Because of this action, the demand for gold increases. Of course, the higher the demand, the higher its cost becomes.
You cannot just assume that this is just an isolated case. Because if that’s really true, giants like China wouldn’t be too fervent in the gold purchase. It is a sign that they are preparing once the value of U.S. dollar goes down again.
Furthermore, paper currencies are always printed on a regular basis. It increases the supply of money, but at the same time, it results in inflation.
Over time, this kind of influx will cause the worth of currencies to go down.
#2) It Survives Geopolitical Crisis
Gold does not only excel in financial upheaval. Its value also shines whenever there geopolitical crisis.
One should know that gold is also referred to as the best “crisis commodity.” Whenever there are political issues that threaten the financial stability of a place, people will tend to purchase gold as a way of safe-keeping their assets.
In geopolitical crisis and other social tensions, it is quite notable how gold exceeds other types of investment. One good example of this is the ongoing crisis in the European Union. The price of gold experienced a significant increase. Apparently, it is already a trend already, especially if the investors’ confidence in their governments is weakening.
#3) Central Banks Are Buying Gold
If you think that it is only large companies and eager investors that are into gold, think again. The central bank of your country is as zealous as other people when it comes to buying gold.
It is not a secret that the economy of a particular country is quite dependent on the groups or organizations that control the supply of money.
Because of this fact, the GDP or GNP may no longer serve as reliable determinants of a country’s economy.
Money supply is manipulated in the higher scale. It is the very reason why recessions and economic depressions happen from time to time. It is quite threatening to think that a few individuals or companies can change the supply of money.
Financial security is one of the main anthems of central banks. Because they are aware of these particular “money plays,” they invest in gold more than ever.
They don’t want the economy of their country go into the drain because of any drawbacks.
#4) It Has Consistent Value Increase
Gold mining has been part of the human history. Since time immemorial, various cultures have high regards to the value of this precious mineral.
Of course, gold is a type of non-renewable resource. We have been mining it for many years already. Right now, we are experiencing a shortage on it. According to some experts, we only have ten to fifteen years until we mine and process the last gold reserve here on earth.
This particular limit to the supply of gold makes it extremely valuable. Therefore, it is not surprising anymore if the price of this metal increases every year.
And if you have a gold stock, this is a piece of good news for you. Just imagine the large returns that you can get because of a wise investment move you did today.
It has been suggested as well that the price of gold and oil is quite correlated. If the cost of oil increase, so does oil.
This is a great deal for people who own gold.
#5) It Helps Diversify Your Portfolio
It is a good thing that you can diversify your portfolio. It is one of the foolproof methods that secure your financial security and stability.
One of the best ways to diversify your portfolio is looking for investments that are entirely different from each other. It should be obvious right now. However, it seems that not all investors are doing it.
What makes gold an excellent means for diversification is due to its negative correlation to different financial elements and even stocks.
Let’s take this one for example. In the 1970s, gold was having a good time in the market. But for stocks, it was a bad decade.
In the succeeding years, stocks have flourished well. But concurrently, gold didn’t fare well that time.
In 2008, stocks dropped at a very significant rate. This was due to the fact that most investors and consumers have shifted their investments to gold.
A good portfolio will always combine stocks, bonds, and gold. This would make it less susceptible to the volatile effects of the economy.
Gold solidifies any assets and strengthens its resistance against risks.
Investing in gold will always be a sound investment move. As stated earlier, the price of gold remains strong albeit different economic challenges.
In fact, it serves as the best safety net if the world currencies and political situations are becoming uneventful. Gold can survive recessions and depressions, too.
Furthermore, gold strengthens the quality of an investment portfolio. It increases the value of accounts and makes it more open to growth and other economic opportunities.
Take into account that the price of gold doesn’t improve with the rise of different classes of assets. It is uncorrelated with other types of assets such as stocks and bonds.
It goes to show that even the price of these assets plummet or rise, gold remains the same. You can purchase it on its regular price without worries that it will be affected by other factors.
It makes the gold an independent asset for a diverse portfolio and gives you a secure feeling that you will have strong economic leverage even in a volatile economy
If you still don’t have gold, it is the best time to invest in it. And if you are looking for a reliable and reputable gold seller, my #1 recommendation is always Regal Assets, you can be sure they can help you out. Go directly to Regal Assets website here!
It is an online site that conducts secure and fast gold trade. They have transparent transactions, and they have regulated prices, too, for gold and other precious metals! To see my full review of Regal Assets, click here!
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