Gold is one of the most precious metals, if not, the most precious metal of them all. Given its attractive features as well as rarity, the price of gold has remained at a constant high. This has also made it one of the most controversial investments because it is an inert metal, and it doesn’t earn interest at the same time.
But why do people still buy and invest in gold? What makes it such an attractive investment, and why should you care about including it in your portfolio?
The reasons for owning (physical) gold goes beyond the possibility of its price rising. You can get several advantages when you invest in physical gold such as coins, bullions, bars, and other forms of jewelry. These advantages put you in a better position as an investor. And as you may have guessed, one of the reasons is the price of gold is set to rise significantly.
For the uninitiated, the price of gold has traded to new yearly highs for each month in 2020. Bullion has already surpassed the 2012 mark ($1796) earlier in July as the RSI established an upward movement back in June.
This movement shows a bullish momentum that is expected to continue throughout the second half of this year.
But to set proper expectations, heavily investing in gold also poses a few risks. Dealers often charge premium fees and authenticating older coins and bars can be a challenge. Also, the liquidation spread is large. Yet, the benefits of buying physical gold far outweigh the risks, and it is an essential part of any strong portfolio.
To maximize the benefits, you should invest in physical gold – not paper forms such as ETFs or futures contracts. If they can even be considered assets, these shares are nothing more than 0’s and 1’s on the computer screen, making them not any different from fiat currency you’re hedging against.
Buying physical gold like coins, bars, and even gold jewelry enables you to maximize the full benefits of investing in gold.
12 Reasons Why You Should be Storing Physical Gold Now
1. Gold is Money
Although gold is no longer in circulation as money, it has shown its stability and superiority in the market for more than 5,000 years. Gold, interestingly, has been used as money longer than any other currency in history.
And since money is seen as a long-term store of value, gold fulfills this purpose better than any other currency. Throughout history, all government currencies have lost their value, unlike gold.
Although the price of gold fluctuates, its value is timeless.When investing in an asset like gold, consider how this can affect your purchasing power over the next couple of years compared to your currency. All paper currencies will lose value over time. This means that the dollars you store in the bank or brokerage savings will eventually lose their purchasing power.
2. Gold is a Tangible Asset
Just like your other physical ownerships, gold can be held or felt. Real gold cannot be destroyed by calamities such as floods and fires.
Unlike other commodities, gold does not require any special care to grow like produce and livestock. And because gold is naturally occurring, there’s only so much available of it. This rarity gives it an inherent value that most commodities do not have.
And since only you will have physical access to the gold you own, it is out of reach of hackers and online thieves, which is one of the advantages of stocking up physical gold.
3. Save Money for the Future
For those who have regular incomes, saving money is an important part of securing your future. However, you may not be able to invest small amounts of money when choosing real estate as your investment.
The simpler alternative is to invest in physical gold such as coins and bullions. Not only will this safeguard your wealth, but it will also provide good returns in the future.
Buying gold coins offered by banks is a safe way to start as these come with a certificate for authenticity. This is not something you get when you buy gold directly from the local market. And for this reason, you will have to pay a slightly higher rate than the market rate, but you have the assurance of the quality of your investment.
If you wish to buy gold directly from the market where prices are more competitive, it is best practice to check the gold rate in Delhi and other metros before buying them from local sellers.
Another critical thing to do is to check the quality of your purchase with reputed sources before choosing them as your investment. A good way to verify the quality of the source is to check if they would buy the same gold coins at a later stage, and you can sell them whenever needed in the future.
Remember, banks cannot buy gold from customers even though they can sometimes provide loans on this guarantee.
4. Gold requires no specialized knowledge
Unlike other specialty assets such as diamonds and stocks, physical gold such as bullions does not require special skills, training, or equipment to recognize its value.
You may opt to buy rare gold coins, but this is where highly skilled and trained collectors thrive. Most investors generally avoid this course. Remember, you invest in physical gold to protect you against crises and shield you from a loss in purchasing power. And for this purpose, buying bullions is the best way to go.
5. Gold does not Deteriorate with Time
Unlike other investment types like properties, gold does not deteriorate with time. The price of gold does not go down due to its age.
Notice how old ornaments made of gold get the same price as that of new ones made of the same material. And when in doubt, you can also check the gold rate in larger markets and other popular hubs to validate this fact and exchange your old ornaments for new ones.
6. It can Protect Against Inflation Risks
For anyone starting on or learning about investments, there is one thing you need to know, which could kill your investment in the long run: inflation. This is the rate at which money depreciates through the years. With this in mind, you should never have your investment in cash as it will depreciate. Instead, consider investing in gold or other safe assets to protect you from the risks of inflation.
If you’re going to examine gold’s performance throughout the years, you will appreciate the fact that gold has outperformed the inflation rate among the different asset classes. By investing in gold, you can reduce your risk by a considerable margin.
You can learn how the gold market works by tracking the prices for a certain period. If you want to know how much gold is worth in the market, you can check out online portals that provide information about such commodities. By monitoring the fluctuation in the market, you can start your investment in a systematic manner.
7. Buying and Selling Gold in the Market is Very Easy Nowadays
As you know by now, buying gold, such as pieces of jewelry, is extremely easy nowadays. Despite this, it still makes sense to buy gold from trusted jewelers who can provide the product’s guarantee certificate. In the same manner, you can easily get gold coins from the bank.
The biggest advantage you can get from reputed sources such as banks is that you are assured of the quality without any risk, and you will also have proper receipts for your future reference.
On the other hand, when selling, choose the local jewelers as they will be the easiest market in this regard. What’s most reassuring about investing in gold is that it’s always in demand, and you don’t need to be concerned too much about how you can liquidate your gold?
You can get immediate cash when you sell them in the market through the local jewelers or traders. But if you don’t want to sell them, you can also pledge them and take a loan from various financial institutions.
8. Easy to Get a Loan Against Gold
There’s no telling when emergencies might happen. And for this reason, you should always be financially ready. On that note, it’s easy to depend on your gold investment as this can be liquidated easily in the market.
And if you do not wish to sell your gold, banks and many other financial institutions provide loans against them in times of emergency. And with gold’s reputation in the market, you can even get a loan within a single day. Banks will give back your gold without any damage after you clear the loan in the future.
9. Gold Can Easily be Passed onto Future Generations
Gold is among the assets you can easily pass on to your next generation, and this is happening traditionally in many countries. Physical gold like coins, bullions, and even jewelry can easily be handed down to your next of kin as gifts or even as investment products.
Since gold does not lose its value even after many decades, your future generations will greatly benefit from owning this precious metal.
10. Gold is an Excellent Addition to your Stocks and Real Estate Investments
Putting your money in the stock market and real estate offers good returns, but in the long term, this will come with a lot of risks. For this reason, you should never invest all your savings on such things.
Gold serves as an excellent portfolio diversifier as the rates of gold will not fall drastically, unlike the stock market and real estate investments. By keeping some gold in your portfolio, your investment will be protected in the long run.
11. Secured Investments when Compared to Other Assets
Buying gold takes away some of your worries that your investment might not do well since gold’s value is stable, unlike other asset classes. Even after decades, you can expect that your gold will keep its value in the market. Gold’s price stability offers complete security for your future.
12. Gold Can Protect Against Corrupt Politicians
You don’t have to become a conspiracy theorist to understand that governments sometimes overreach. With their power, they can freeze bank accounts, garnish wages, and even confiscate funds.These activities even become more apparent in times of economic or financial crisis. Because governments will need more revenue in challenging times, they tend to be more aggressive in their enforcement. Else, they could simply pass new laws and regulations to suit their needs at the time.
One good way to protect ourselves against such actions is by holding physical gold offshore.Diversifying internationally may sound complicated but storing some physical gold outside your home jurisdiction is not as challenging as you might think. It’s as simple as opening a bank or a brokerage account these days. By doing so, you create a safety net for yourself in a worst-case scenario. Even if you never get to use this “safe” asset, treat it as an insurance policy against aggressive or unfair political actions. You could even use the proceeds of any sales to invest in other options that may not be available in your home country.
Even if you’re just exploring the possibilities about investing in gold or are doing some more digging in your investment options, there’s no doubt that physical gold offers a unique detail to your investment portfolio. As we have listed above, there are many benefits you can enjoy when you start buying physical gold.
The value and stability of gold make it a unique commodity and an investment at the same time. And based on what we’ve learned from history, difficult times and challenging circumstances will always point us to gold. It is a “safe-haven” asset to counter the negative effects of market strains and economic crises on our wealth and our investments. And for such reasons, gold can be considered an essential investment for all kinds of investors.
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