When you decide to invest in precious metals, you’re really investing in an asset class as old as civilisation as we know it. But these ancient means of wealth can actually play an important role in your modern investment portfolio.
Let’s take a look at why exactly buying physical gold assets is a very smart investment indeed.
1. Buying power
The supply of gold is basically finite. That explains why gold’s relative purchasing power has remained stable during even the most historical of inflationary times.
2. In demand around the world
An ounce of gold in one country is basically the same in value anywhere in the world, which means physical metal is very easy to trade.
If you want to find out about the latest prices, check the gold bullion price City Gold Bullion indicates on their website.
3. A value that doesn’t fade
Some gold coins or bars remain in families for many generations. Even over the passing years, recipients realise the value of such an inheritance. Physical gold is a tangible way to pass wealth onto your future generations.
4. The perfect balance
Generally, the price of precious metals tends to move independently of bonds and stocks. In downturns, this means they offer a bright spot for your investment portfolio. Gold’s low correlations to other assets makes it the perfect balance for your portfolio.
5. Diversification
Everybody with an investment portfolio should try to diversify exposure amongst their asset classes. In other words, you need assets that move to different rhythms and offer some sort of protection across your portfolio. Gold tends to move independently, offer an excellent source of financial security in times of hardships.
6. Currency and Inflation Hedge
If you think currencies are headed for a decline any time soon, precious metals like gold offer a way to hedge this risk. As a currency starts to weaken, so the value of precious metals increases. When it comes to inflation, some people argue the precious metals like gold will rise during periods of high inflation, therefore protecting purchasing power. Others dispute this claim, so it’s up to investors to do enough research and educate themselves before making any investments.
7. Economic collapse hedge
The media has a good time highlighting people who believe the end of the world as we know it is never far off. Precious metals, they argue, could well be a means of barter as the end of times edges closer. Of course, this is just a dose of speculation, but there’s no denying that should the world’s economy undergo some type of drastic change, gold could be the one stable and necessary commodity.
Investors should always aim to diversify their portfolios. Not only should you be holding bonds and stocks, but physical gold is a smart way to secure yourself for times of economic hardships.
Make sure you learn as much as you can before delving into investments and to ensure you invest in the best form of gold for your investing needs to ultimately secure your future.
