Gold is one commodity that has stood the test of time. It has been around for centuries and has maintained its value over time. It can be a good investment for both the long and short term. Here are some benefits of investing in gold.
Is gold a universal currency?
President James Madison believed that gold was a universal currency. It is a universal commodity that can be exchanged in any part of the world. Also, it is the least volatile commodity in the world today.
Protects you from inflation
Gold is a perfect long-term investment because it hedges against inflation. Most currencies are prone to inflation and continue to lose value over time. Gold does not. Rather, its value increases over time. Since it does not rot, you can get a higher value for your gold investment after a long time.
Using the USD as an example, the currency is considered one of the strongest in the world. Still, it has declined over the years due to several reasons.
Accessible
It is easy to buy gold and sell it too. It is available in jewelry stores across the world. However, it is advisable to buy gold from trusted jewelers. Also, the jewelers should be able to provide a certificate for each bar and jewelry.
Selling your gold is even easier: you can contact a jeweler and provide your certificate. Each one is sold according to the prevailing market price. The rate changes often, so check it before selling.
Stable price
Gold maintains a stable price despite economic weakness. In most cases, people buy gold during tough economic periods to hedge against inflation. This increases the price as opposed to other instruments like the equity markets, which crash without notice.
Whenever investors need to bet, their go-to option is gold. Stock prices can fall, but gold will remain stable.
No extra cost
There is no maintenance cost associated with keeping gold. You only need to store it in a safe place, and it can last for decades unscathed. You don’t need to keep it in a bank or in circulation like paper money.
Passes from generation to generation
Gold is an excellent heirloom for families. You can pass it down from generation to generation and keep the value. Besides being an heirloom, it makes a perfect gift for loved ones.
Gold can be used to make different kinds of jewelry, including necklaces, rings, watches, and more.
Excellent security for loans
You don’t have to get rid of your gold or liquidate it to get funds. Simply use them as collateral to secure loans. Since it is a strong instrument, you’ll get the loan as quickly as possible. The bank knows they can get the value back if the need arises.
Doesn’t deteriorate
Gold is not like buildings that deteriorate over time and need renovations. It does not change after several years because it doesn’t react to oxygen or other acids. This is why it is known as one of the noble metals.
No matter what the gold is used to make, it can be broken down and remade into something else. From necklaces to bracelets and rings. If you like to look at a big gold bar, it works fine too.
Uncertainties
Political uncertainties can stifle cash flow. During these crises, it may be difficult to move money. A more tangible solution is to carry gold. It is a universal store of value and can be used anywhere in the world.
Increased demand
Various countries have been using gold as a store of value for centuries. Countries like India and China are at the top of that list. Hence, there is always a demand for gold. Investors also turn to gold as it has become one of the most traded in the world.
Conclusion
Gold has been around for years and still continues to be a valuable metal. While there are some cons of holding gold, it is nothing compared to the benefits it provides. Countries and investors recognize its value and use it to hedge against inflation and other economic problems. It is also a great way to save long-term and diversify your portfolio.
DISCLAIMER
This article is for informational purposes only.
Investments may not be suitable for all investors. If you have any doubts as to the merits of an investment, you should seek advice from an independent financial advisor.
An investor may get back less than the amount invested. Information on past performance, where given, is not necessarily a guide to future performance.
