So you are still confused about gold as an investment platform? Isn’t it time that you realize the endless benefits you get after buying gold jewelry? If you want to know about the most intriguing reasons to invest in gold, then we have your back.
Take time to understand the below-stated points and use them to create a separate gold investment portfolio.
The gold hedge
Generally speaking, hedge investments cancel out a loss suffered in a different asset class. People buy gold to balance their finances against the decline of the US dollar. Gold serves as protection against inflation whenever any currency experiences a downfall.
For instance, between 2002 to 2007, gold’s value doubled to $833.75 for an ounce. It was an after-effect of dollar’s fall against the euro. The price of gold went up for fifteen days on the trot after the 2008 financial crash. However, it lost value against stocks, which started to rebound again. Still, for that period, it saved a lot of investors by hedging their investment.
As a Safe Haven
In the world of trading, a Safe Haven protects investors from financial disasters. It is the sole reason the majority of smart investors bought gold during the crisis years. With the eurozone crisis on peak gold’s price leapt and bounded towards new heights.
Almost all the investors were in doubt due to the 2011 debt ceiling trouble and outcomes of the Dodd-Frank Wall Street Reform Act and Obamacare. Some even feared a total collapse of the US economy. Due to the absence of reliable information and assurance by the government, gold prices plunged again.
It is a direct investment
Thus, many investors bought gold to take advantage of the price increase and future profits. Some of the investors saw gold as a precious, valuable asset which might get useful in industrial uses. Also, the government held a lot of gold to balance its depleting reserves.
It’s a cushion for geopolitical turbulence
Irrespective of any geopolitical uncertainty, gold will never lose its value. Investors and the general public tend to rush towards gold, as in the time of international crises, it outperforms all other investment platforms. Take the example of the recent hike in gold prices while the tensions in the European Union rose dramatically.
It doesn’t require expert knowledge
Unlike other channels of investment, gold’s management does not require specialized knowledge or experience. It is a tangible asset that holds universal value. Gold will give you returns even if the stock market has fallen short of expectations. But, do not consider it as a “fool’s investment” as gold holdings are even better than blue-chip stocks.
It diversifies an investment portfolio
Gold investment is known to diminish the overall volatility when it’s combined with stocks and bonds. It will maintain its value till bonds and stocks perform well, but in a contrary situation, its value will rise instead.
Investment in gold should be your priority even if you have ample money to lose. This asset is full of benefits in both best and worst financial conditions. However, you won’t earn dividends, and the returns will depend on someone else’s discretion to buy the asset.