Professionals in the finance industry are sure about one thing – a percentage of your investment and savings should be kept in precious metals. That’s a great way to diversify and keep your money safe in the complicated world of investing.
Opinions differ when it comes to what percentage of your income should be dedicated to this purpose. It mostly depends on how you view gold and its role in your financial plans. You need to determine if your goal is to save money using gold or to use gold as an investment.
Saving in gold
Gold has been used as a currency for millennia. That’s the case in almost all cultures across the world. There are a few reasons for this. First of all, it’s sturdy and versatile, but still fairly easy to shape and be used in a convenient way. And, secondly, there’s a limited amount of it available, which makes it valuable.
Gold is still a great way to save money, and it’s becoming more popular than before now, when the global trade and global economy in general have proven to be fragile and prone to sudden changes and even sudden crises. The value and the price of gold don’t fluctuate that much and they are not connected to the fluctuations and changes in the market. The price of gold also doesn’t change based on the actions of any particular government, which is a plus in a globalized world.
All of this makes gold a great way to save in the long run. It’s also easy to store and it won’t get damaged with the passing of time, but it’s still movable and easy to transport if there’s a need to do it quickly.
Gold as wealth
When trying to determine why gold is a great way to store wealth, you should first consider what wealth is in the first place. It’s the ability to purchase goods and services. There’s nothing about government -issued money (so-called fiat money) that allows you to do this. It’s the value that society attributes to the money that does.
Gold is universally considered to be a precious metal for numerous reasons. First of all, it was that throughout history and that hasn’t changed, regardless of the political system we live under. There’s also a need for gold at all times in certain industries – jewelry and the IT sector most of all.
When you buy gold, you’re hedging your wealth, because it’s not affected by governmental entities of any kind. You can go anywhere in the world and gold will still be universally regarded as valuable and there are going to be ways to sell it almost right away if there’s a sudden need for it.
Investing in gold
Investing in gold is different than simply saving in it. It’s similar to other investments in terms of the ways it operates – you buy gold at a certain price and sell it at a higher one when the time is right. However, fluctuations in gold prices are smaller, so this is more of a long-term endeavor. Gold should always be a portion of your portfolio since its value is inversely correlated to the value of stocks, bonds, and foreign currencies.
There are a few ways of investing in gold and buying actual physical gold is the easiest one. However, some hesitate to do so because that brings up the issues with safekeeping and storing it. It can also be difficult to move it if there’s a lot of it in one place. Another way to go is to invest in gold exchange-traded funds which trade in gold similarly to trading in foreign currency. There are also mutual funds that invest in mines. That’s a more complicated business deal but like with any other mutual fund, you can choose how involved you plan to be.
The main advantage of investing in gold is that it’s a relatively stable investment that serves to diversify your portfolio and be a safeguard from market crashes.
Saving and investing in gold can be a lucrative addition to your financial endeavors. It’s an investment and a saving technique that doesn’t depend on governmental actions and isn’t subject to quick changes in value, which are useful features in the world of finances.