Deciding to invest in gold can be quite confusing. If you are one who reads a lot, especially online, it is even more difficult because of varying opinions.
One of these opinions is that gold is not a very good investment. More so, it does not produce anything, and it is only a relic. Thus, gold is an unproductive asset that does not contribute to any economic growth.
Unlike money invested in a business that will grow in a somewhat obvious and fundamental way, gold stays the same. Besides, the only use of gold lies with industries, and they only use a small part, which does not affect its price or demand.
So all those opinions got you thinking, is buying gold a good investment? Are the statistics of gold trading farce? Should I invest in it?
Gold and modern economy
Conversely to those opinions, do you know that International Monetary Fund (and other financial organizations) hold one-fifth of the world’s supply of above-ground gold? If gold is such an unfortunate investment, why is such an international organization wasting their time with it?
Above all, gold remains a popular and excellent investment. Not only that, it is as well crucial to the global economy.
Furthermore, gold preserves wealth, which can’t be said about the new paper-denominated currencies. Let’s make that practical:
Say some 50years ago you had a choice of either buying a bar of gold for $35 or only keeping the money. Yes, they would have purchased the same commodity then. However, in today’s prices, your $35 would have depreciated while gold value increases.
So, is buying gold a good investment? Perhaps, you still have a few doubts. Here are some other reasons why gold is a good investment:
- Gold is a dividend-paying asset
If you are a growth investor, gold stocks will be appealing to you. At the slightest increase in the price gold, there is a massive leap in the gold-stock prices.
In that way, you, as the owner of these gold stocks, will obtain a considerable and significant return on investment (ROI). Even in times of downturn, a gold stock with a strong dividend performance will remain profitable.
- Gold is a diversifying investment
Gold is readily and historically a diversifying investment. That is a good option when you are looking to diversify your portfolio.
Moreover, it does not correlate with real estate or any other sort of investment.
- Gold is a haven against political and economic uncertainty
One of our modern realities is political instabilities. In times like that, money tends towards a critical low.
Gold, on the other hand, will help investors shield their wealth and, as such, provide them with an escape route through all the fluctuations.
More importantly, it is good to note that all investments have ill and good, gold is no different. More so, the best time to invest in gold is when it is accessible on the pocket and with much negative sentiment. That way, it will proffer a significant boost when back in favor.