Unlike money or other assets, the value and rarity of gold makes it unique. Although it’s not a high-yielding asset, the value of gold will endure and can mean great returns in the long-run. We outline the 5 reasons why more people and investors are adding gold to their investment portfolio.
Gold has a history that spans centuries, maintaining its value throughout the ages. It’s the world’s oldest form of currency and although widely available to trade, it is a finite resource, meaning that it’s rare enough to be considered valuable. The same can’t be said for other metals which aren’t durable like gold is and will corrode over time.
During periods where there’s little to no interest rates, the money in your savings account slowly loses its value each year. On the other hand, gold can be used to hedge against inflation as it maintains its value. While the dollar value depreciates, gold typically appreciates.
Over the past 15 years, gold has risen on average 9% per annum – 264% growth in total! Although gold as an asset doesn’t pay dividends or provide gains in the short-term, it can prove to be quite lucrative and rewarding in the long-term.
If your investment portfolio already includes property, stocks and bonds, gold is ideal to diversify and ultimately reduce overall volatility and risk, particularly through uncertain economic and political times. Historically, gold is not affected by the same influences as stocks, so when they decrease in value, gold will increase.
Gold can easily be traded or converted into cash no matter where you are in the world. Here’s how we’d spend our cashed in gold bullion: 4 ways to spend your $125,000 cashable gold bullion. When is the best time to sell? There are various factors to consider, but two important ones would be economic conditions and your personal circumstances on how soon you would like to access the funds. That being said, it’s ideal to purchase gold when prices are low and sell when prices are high.
As with all forms of investment, it’s important to consider your own financial situation; do your research and seek advice from a professional financial advisor.
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