Some think that gold investment is kind of a poor investment while others think it is the real stuff in every manner. However, the truth is somewhere in the middle. It may be good for some people while not effective for others.
Just like all the other financial products, gold is not one size fitting all the solutions. Gold investment will be appropriate for some people but may not be for others. To facilitate you in this regards, if gold investment is good for you or not, we have enlisted top most reasons as under:
Pros of gold investment: These include the following:
Inflation insurance: Gold protects the people from inflation. The thoughts that if the country’s currency is devalued, gold will be retaining indeed and most of the times it increases in the value.
Disaster insurance: Some of the people consider gold as one of the assets that will remain in demand, regardless of how bad times are. The idea is that a valuable asset will be with you even when there is financial crunch in the country.
Diversification: Investors like to spread the money around. They are never willing to put all the eggs in the same basket. Hence, you may buy the stocks, property, bonds, and gold. You need to analyses that if market crashes then first three investment may be in trouble however gold will retain the value. At times it increases in the value as well.
Simplicity: It is always easier to buy the gold bullion or gold coins rather than picking or selecting the right property or stocks to invest in.
Tangibility: Some of the people do not feel like buying assets that they cannot touch, such as crypto-currency, and shares. It is due to their skepticism if the electronic files will retain the value in long run. They prefer having tangible assets like gold. It is usually believed that gold will retain the value, no matter what happens.
Cons of the gold investment:
No yield: If you put money in a deposit you can earn an interest on that. Also you will be receiving dividends if you will be making investments in shares. On the other hand, gold will not earn you any yield.
Lowered capital gains: Property as well as shares tends to gain more value as compared to the gold investment. For instance, if the gold price increases 132.9% between 1980 to 2017 then all the ordinaries have been seen to be jumped by 1,133.5%.
Annoying to transact: When dealers buy or sell gold they enjoy significant margins. Authenticity is an issue as well. When you will be buying gold, you must ensure that you are buying the real one. On the other hand if you are selling the gold, you should prove the fact that you are selling a genuine one.
Hard to be stored: Once you have the gold, what will you do with it? Will you hide it under the bed or put in the bank?
Volatility: Gold prices can win great chances for you in very short span of time.