When it comes to investing, one of the most essential decisions lies in choosing where to place your investments. In a nutshell, a wise investor will always choose an investment option that is safe, profitable, and carries less risk.
It could be a long-term or short-term investment, but what matters most at the end of the day are the returns you get from it. Now, there are many different investment options, each with its fair share of merits and demerits. For various reasons, however, gold comes out on top of other investment options such as stocks, bonds, and the like.
For starters, gold is a precious metal that has been considered highly valuable throughout the years in history. Thousands of years back, it was actually used as a currency in many societies; no wonder it still has an impact on economies a few millennia later.
What’s more, you don’t actually have to possess physical gold to own it these days. It’s more about the value, which means you can buy gold and sell it at a considerable profit without having to hold it in your hands or even see it.
As an investment, gold comes with quite a several perks, some of which you may already be acquainted with. You will never go wrong investing in gold, especially if you’re strategic and well-informed. To skip the mumbo jumbo, here are a few reasons why gold is always an excellent investment.
A Hedge Against Inflation
As the years pass by, new technologies are discovered, competition in the markets gets stiffer, and the supply of existing commodities and services gets higher, the purchasing power of currencies declines, and the cost of living increases.
This is known as inflation. However, the fact that gold retains its value through the years makes it a great hedge against inflation. The precious metal is always in demand, meaning that its value doesn’t succumb to the fangs of inflation. Tim Schmidt and the folks from https://www.irainvesting.com/ say that investing in gold can be an incredible way to protect your investment portfolio and wealth.
A gold IRA, which involves diverting some of your retirement savings into gold investments, can also protect your retirement investments from inflation and other issues of market instability. As far as inflation is concerned, you can never go wrong investing in gold.
A History Of Holding Its Value
If you look at the history of gold keenly, you’ll realize that it has maintained its value quite well compared to standard currency and assets over the years. This is perhaps in part because it’s vied as a precious metal as well as an instrument that can be used to pass wealth from one generation to the other.
This is not to forget how its immense beauty, malleability, and low refractive index make it an adorable metal, suitable for a variety of uses. In a nutshell, the rich history of gold and value retention keeps it in demand, which means that you’ll hardly lose your investment no matter how many years you hold on to it.
The Low Supply Rule
Since the 90’s much of the gold in the markets has come from global central bank gold vaults. Over the past few decades, the production of gold from mines has been on the decline. This is not to forget that before a new gold mine starts production, it can take up to 10 years give or take.
These are just some of the various factors that make gold a scarce commodity, keeping its prices on an increasing curve. This means that with the right approach and speculation, you can buy gold today and sell it at an incredible profit a few years down the line.
Protection Against Deflation
Especially in the wake of the COVID-19 global health crisis of 2020, prices of investments such as stocks and bonds may decline. Business activity has slowed and economies could be overburdened by debt in case the situation doesn’t improve in the next few months after April.
This is termed as deflation, a scenario that was witnessed some years back in 2008’s great recession where, while prices sharply dropped, gold’s relative purchasing power soared. In such uncertain times, gold can be a great way to stash your money and escape some of the harsh effects of deflation.
Finally, gold is always portable, liquid, and easy to sell. Its demand is always on the rise and as an investment; it allows you to diversify your portfolio. Being a hard asset, it’s also considered a safety trade. No matter how much of it you buy and keep stashed somewhere, gold is always a great investment.
If you are interested in even more business-related articles and information from us here at Bit Rebels, then we have a lot to choose from.