April 17, 2021 Last updated April 17th, 2021 1,483 Reads share

6 Reasons To Invest In Gold And Other Precious Metals

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If you’ve been in the investment industry, you might have heard of some companies offering investment opportunities that tie with gold and other precious materials. Maybe you’ve even heard that investing in stocks and bonds can be less stable (read more) than investing in these precious metals. Its entry point, ranging from $600-$700, is already high compared to any of its counterparts. Take note that this entry point can also rise in the right circumstance.

Therefore, it’s only logical to choose them as an investment option, isn’t it? Not only will this choice be your safety net whenever untoward events happen (stock market crash or COVID), but it can also spice up your portfolio and bring variety to it. It’s good to invest in stocks and bonds, but you should spread your investment around and consider gold and precious metals as well.

 

  1. Gold > The US Dollar 

All over the world, the US dollar is revered as one of the superior currencies. Almost all other currencies are compared to the US dollar, which the latter almost always comes out on top. However, it has its downsides, mainly during the 1998-2008 time period where the value of the dollar drastically fell. Because of this, investors sought gold investment companies and find safe harbors. During this time, gold’s value never wavered, which many considered their safety net.

In fact, during this time, many experts found the value of this precious metal increased drastically. This means gold has a way of going against the economy, especially when it’s going downhill. Although we can’t exactly call it inversely proportionate to the market, there is a significant difference in its overall value during crises, stock market crashes, and global tragedies. During August 2020, during the peak of the pandemic, this precious metal broke its record, surpassing $2000 in value.

Although today, gold’s value has dipped somewhat, many experts still expect it to rise shortly. As the pandemic continues around the world, there’s a big chance of its value to rise again, especially when the dollar and its value change consistently.

 

  1. A Long History Of High Value

Since back in the dark ages, this precious metal has been a well-sought commodity due to its elegance and shine. It’s also a form of currency way before there was the US dollar or any currencies. Gold used to buy goods is older than the British pound (link: https://www.weforum.org/agenda/2016/06/a-short-history-of-the-british-pound/), the most ancient man-made currency. It existed 1200 years ago, while this metal has been around for almost 3000 years.

Gold and its enduring value are still true until this day. Though this precious metal is no longer only used for its beauty and as a currency, but with a million other different things. One of them is for investing in a reliable asset. Banks have been at the forefront of buying bouillons to expand their reserves. Even they know the underlying benefit of investing in gold. They also see the value of diversity in their portfolios.

 

  1. Gold Is Tangible

Buying gold and investing in it can bring relief and peace of mind because you can see and touch it, and you know it has a physical body. Owning some can also be a great investment, as this precious metal is neither a renewable source nor a common commodity. This means its value is ever so high, and if ever its value does dip, it still is worth more than other assets you can invest in.

Other than that, unlike other virtual assets, gold can’t be hacked or taken advantage of. There’s the thought of robbery, but with today’s technology and high-security policies, it’s almost impossible to steal them, especially with well-known, highly guarded establishments.

 

  1. It Can Diversify Your Portfolio

Ever since gold entered the investment scene, it has been a safety net for many investors that tend to venture into risky deals, or just for those who want stability in their portfolio. While you can easily get losses from stocks and bonds, this precious metal can even out this loss by bringing more profit into your pocket, especially during a crisis.

 

  1. Government Debts Around The World Are Steadily Rising

No government is an exception to debt, even those who lend their resources. The last recorded global government debt is already up to $120 trillion, and that was back in 2008! This means as long as there is debt, there is an economic crisis, and gold has a great value in the market.

 

  1. Demand Is Rising While Resources Are Shrinking

Recently, as a spike in wealth in many markets happened, the demand for this precious metal has taken a spike as well. This means this metal is dwindling, which is a good thing for those who have already invested in them for a long time. Other than that, a lot of countries consume gold because it’s tied to their culture, such as India. India uses this precious metal for their religion, parties, and even just a normal accessory, resulting in wealthy Indian households holding more of this metal than global banks.

Another large country known for consuming gold is China. Although China doesn’t practice its consumption consistently, a seasonal event, in which people are encouraged to exchange jewelry is observed by this country. This gift-giving is called the Love Trade and can also be practiced and seen in some parts of India as well.

With two countries, and not counting other countries and markets that buy gold every single day, gold resources are dwindling as time passes by. Investing in this precious metal, while its value is high and still available, has never been more well-timed than today.

 

What You Should Do

Need we say more? There’s a lot of reasons to invest in gold, from its value to its nature in the market, there are more green flags than red in this venture. The next step after you decide is to choose a really good investment company and start your journey with a professional.

 

 

 

 

 

Dmitry Kozlov

Dmitry Kozlov

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