When you think about any rich person portrayed on TV, you’ll probably envision piles of gold sitting in a safe. There’s a reason for this: this precious metal has always been valued throughout time, as not only does it have value, but it also has many applications throughout various industries.
So if you have some extra cash lying around and you want to make investments, then gold is an excellent choice.
Of course, you shouldn’t jump into any investment without doing research first. Keep reading to see why you should pick gold as your top choice.
It’s a Stable Investment
Gold is a fantastic investment if you don’t like taking big risks. Putting your money into anything is risky since you can’t predict the future. But gold is pretty safe.
If you look at its historical value, it hasn’t changed much when compared to other precious metals and assets. It’s a great way to build wealth and pass it on to future generations.
When investing in actual gold items, such as bars or coins, you won’t have to worry about them corroding. This metal’s natural properties also allow it to be easily melted, so you can always repurpose your gold if needed.
You Can Hedge Against Inflation
You never know when inflation will hit hard. If you notice that your cost of living is increasing, then there’s a good chance there’s inflation. This can make it difficult to keep money in your pockets, especially if your earnings haven’t increased to match it.
The good news is, the price of gold generally goes up when inflation occurs. So if you buy before it settles in, you can hedge against inflation when it does happen. This can help protect your wealth over a long-term basis.
You Can Protect Against Deflation Too
Although deflation doesn’t happen often, it’s still a possibility; the last time deflation hit the world hard was the Great Depression in the 1930s.
Because the value of fiat currency isn’t tied to the value of commodities, gold will hold its value during times of deflation too.
It’s a Safe Haven Asset
Gold is considered a safe haven asset, meaning that investors usually turn to it when there’s economic uncertainty and volatility. So one of the advantages of opening a gold IRA is that you’ll have a more secure financial future. This precious metal’s value isn’t impacted by stock market fluctuations, so it’s a stable and reliable investment.
If you look at any news source though, you might see that gold’s had a turbulent year in 2022, as with everything else. However, in the long term, you can expect to remain a safe haven asset, considering that it still outperformed the equity market.
There’s a Global Demand for Gold
As we’ve mentioned in the introduction, not only has gold been used throughout history, but it has its uses throughout various industries. This means that the demand for this precious metal won’t die out.
In addition, many cultures highly value gold for savings or jewelry. For example, the people in China have a tradition of using gold bars for their savings. And India uses a vast amount of gold for jewelry, namely, for weddings.
Taking into account that traditions die hard, you can count on the global demand for gold to stay steady or grow even more in the future.
It’s Highly Liquid
Gold is highly liquid, meaning that you can sell it easily for cold hard cash.
Usually, you’ll want to leave your investments alone to grow in value, so liquidity won’t matter too much in those cases. But if you want quick access to your funds, then gold’s an excellent one to put your money in.
Of course, it’s still a good idea to leave this investment alone for as long as you need. But if you need quick cash, or the prices are just too great, you can sell your gold fast and get the maximum value possible.
There’s Only a Limited Supply
Because it’s a precious metal that needs to be mined, there’s only a finite amount of gold to work with at any given time. And sometime in the future, our planet will be completely mined out of gold.
Currently, there’s a decline in gold production. This is putting more pressure on the world to set up new mines. However, it can take between five to 10 years for a new mine to come into production.
This means that demand will continue to be high while supply will continue to be low. It’s almost a sure thing that gold’s value will increase.
There’s Potential for Long-Term Growth
Yes, the value of gold has historically been pretty much stable. However, this doesn’t mean it always will be.
Obviously, the value can dip, but that’s not likely. Instead, experts think the value will only rise, especially when you take the above factors into consideration. Add in favorable economic conditions, and it’s almost a guarantee that this will happen.
You Can Diversify Your Portfolio
If you’ve already taken the plunge as an investor, then it’s fine if gold wasn’t your first choice. That doesn’t mean you have to miss out.
You have nothing to lose by adding gold to your portfolio, especially with all the above benefits. Plus, it’ll diversify your investment portfolio too.
As a result, you’ll reduce your overall risk. If any of your investments fail, you have others to fall back on. And because gold isn’t closely linked with other assets (like stocks and bonds), this further lowers your risk.
Start Investing in Gold to See Your Money Grow
Whether you’re a first-time investor or you already have a huge portfolio, gold is an outstanding asset to have. Not only has it historically kept its value, but it’s set to grow even more.
Because there’s only a finite amount of the precious metal and current mining efforts can’t keep up with demands, there’s probably no better investment to make. So make sure you get in on the action while you can; otherwise, you might be kicking yourself when you see the prices soar.
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