Benefits of Investing in Gold
Gold is a limited resource; while it is possible to mine or otherwise extract more gold from the Earth, no new gold is actually being created.
This means that there will come a day when all the available gold is in people’s hands, and there are obvious reasons why you might want to be one of those people who’s holding gold.
While the markets for gold and other metals are definitely volatile, gold has historically proven to be a good long-term investment.
It’s also important to note that not only does it track steadily upwards over the very long-term, but it is a good hedge.
Gold goes up when other markets go down. During the 2008 financial crisis, the S&P 500 fell 36% but gold went up 25%.
This is in large part because gold is traditionally seen as a safe investment (see above; they’re not making any more).
The demand for jewelry remains surprisingly constant even when markets are in turmoil, and the jewelry industry accounts for about 50% of all gold demand around the world.
Although they are smaller markets, the demand for gold to be used in dentistry, technology, and other scientific fields also tends to remain relatively stable.
Even when there is real doubt about which companies, or which markets or even industries, will survive, there is little doubt that there will still be a market for gold.
So, gold is a safe investment even in a very bearish market.
In addition, gold, especially physical gold, is also an easily accessible investment. Gold can be purchased or resold just the same as any other tangible good.
Most individuals know how to shop and they can walk into any gold merchant and walk out with gold jewelry or gold coins. Not having to learn the language of futures or brokerages makes gold an appealing investment.
Owning gold jewelry and gold coins is also appealing because they are pretty and they are tangible. It is very satisfying to be able to wear your investment on your wrist or display it in your office.
Quality jewelry is often passed down through the generations, and it’s the kind of legacy that people are proud to will to their children and grandchildren.
The benefits of investing in gold are myriad. There are investment options that are suitable for anyone from a shopper/collector to a sophisticated trader managing put-call options on the exchange.
People who are looking to expand and diversify their portfolios as well as hedge against (very likely imminent) big bear markets would do well to look into gold.
Gold can be bought as gold bars or futures contracts or stocks and funds.
There’s something for everyone at every stage of the investment game. Buying gold is buying the ultimate limited-run collector’s edition because once it’s gone, it’s gone, and there isn’t going to be any more.
That’s as good a reason as any to venture into the gold world, and there are plenty of ways to do it safely and smartly.