Is Gold A Good Investment Idea?

Top Rationale To Add Gold To Investment Portfolio

DISCLAIMER: I’m not a financial advisor and this is not financial advice. Investing involves the risk of loss. You agree that you alone bear all the risk of any financial or investment decision that you choose to make. All content is for informational purposes only.

Why buy gold? Gold is often viewed as a recession-proof investment because it repeatedly increases in value when the stock market is experiencing a pullback. Adding gold to your portfolio can help you diversify your portfolio. This can help you more effectively weather a recession, but gold does not generate cash flow like other assets.

Gold has been a symbol of wealth and power throughout recorded (and unrecorded) history. This long-running value demonstrates the stability of gold and its staying power over time.

Gold is considered one of the safest investments by investors, and it often recovers its value in economic recessions. When investor confidence is shaken, gold prices often rise as nervous investors seek a safe place to stash funds taken out of the market.

In times of inflation, gold is a safer investment, as it retains its value better than currency-backed securities, which may appreciate in value but fall in price. Gold is a better safety against a financial crisis. Financial experts often recommend that you have a portion of your assets in gold as a general rule of thumb. If your other stocks are lost in a crash, your gold should follow historical trends and increase in value.

In times of economic uncertainty and instability, buying gold makes sense. Following the 2008 crisis, confidence in the banking system has been irreparably damaged, and people don’t believe that their money is safe with people who have already lost it once.

The stock market plummet in March 2020 was devastating for countless Americans. Retirement funds that had taken decades to create incurred double-digit losses as a result of the market’s performance due to the COVID pandemic. It has since recovered but this shows how volatile the stock market can be.

Aside from the volatility of the stock market, the value of the dollar has been declining for years now. What does that mean for anyone with cash reserves in their bank? Precious metals, which have appreciated in value over the past few years, can offset that loss. Precious metals are a great way to hedge against inflation and can even increase the financial stability of retirement accounts. According to the Bureau of Labor Statistics’ consumer price index, prices are now about 53% higher than average prices since 2000. In other words, $1.00 in 2000 is equivalent to $1.53 today.

What does all this mean?

A $100,000 investment in gold in 2000 has a purchasing power of about $535,000 today.
$100,000 left in cash in 2000 would buy roughly $65,000 worth of goods today.

The silver mercury dime had a face value of $0.10 in 1946, which was the equivalent of a loaf of bread at the time. According to my experience, the same silver mercury dime today is worth on average $2.50, and the same loaf of bread is now worth $2 or more. That’s how precious metals work: They lock in your buying power.

Since 2000, physical gold and silver have outperformed the S&P 500, increasing 514% compared to 174% as of this writing, which I see as financial insurance against inflation. Gold bullion is the ultimate form of insurance and, due to its high value, it should be considered a vital part of any investor’s portfolio.

Reasons Gold Is Worth Buying

Here are some of the many reasons why purchasing gold is a good investment. Owning gold could provide the ultimate insurance for turbulent times. It’s an age old question that people have asked for centuries: “Where is my money really safe?”

The world economies may not be in the same turmoil as they were five to ten years ago, but the economic situation is not substantially improved. Gold is now the answer of choice for a growing number of people. Living costs are higher, while wage growth has been very slow to catch up with inflation.

Banks are wary of lending, and interest rates are very low. This is where gold comes in, as it offers about as much certainty as you can get. Gold bullion is a good way of hedging against other investments, as its value tends to be particularly buoyant when other investments, such as stocks and property, are under-performing.

Gold can also be used to insure against other economic factors such as inflation and deflation, interest rates, stock market jitters, and currency problems. As a highly precious metal, gold’s value is internationally recognized, and it is a desirable luxury no matter where you live.

It is often said that there is never a bad time to own gold. It is a physical and timeless asset that can not be devalued in the same way money can, when any government simply decides to print more. Gold is a low-risk security asset for you and your family’s future.

The unpredictable nature of the world economy suggests that gold prices will continue to rise over the long-term, but they shouldn’t be the main reason for investing in gold.

Investment in precious metals should be viewed as a safe, long-term, non-speculative way to protect your wealth.

Having gold in your portfolio is a unique and attractive way to spread risk among other investments, such as stocks, property and currencies.

Buying physical gold bars and coins, as opposed to paper gold or electronic gold (ETFs), is the only way to achieve this goal. Buy gold first as a measure of safety for the future, and secondly as a profitable investment.

Demand is also important, as many experts believe that the metal will remain a highly valuable commodity for many years to come, with world gold reserves lower than ever and general demand in many countries higher than ever before.

The World Gold Council has released figures that show a year-on-year increase in gold and silver demand – for investors as well as industrial uses. We see more gold and silver used in modern technology for industrial purposes, whether it’s smartphones, electric vehicles, or solar panels.

Don’t make the mistake of thinking “I’m not rich enough to buy gold.” Gold investment is a simple and reliable way of securing and preserving your wealth in countries such as Germany, India, and Russia, some of which have already experienced economic collapse in the last few decades. Buying and owning gold is a very common way of protecting and preserving your wealth including in the United States.

If you’re looking for the best gold investing, see our review of the The 5 Best Gold IRA Rollover Companies