Is investing in gold bullion a good decision? It’s natural for any investor to question whether a particular asset is a wise investment. It is especially true in the case of gold because it doesn’t earn any interest or give dividends like other stocks or shares. So, why should you invest in gold?
Gold is not supposed to do all that and this is the best part of investing in gold. Owning physical gold means you don’t need to worry about:
- Unhappy shareholders
- Changes in dividend
- Earnings reports
- Interest payments, etc.
It’s one of the few assets where the above-mentioned factors are absent. And that is what makes it one of the best risk-free investments that stores value for you. Unlike paper currency, shares, and various other assets, gold has maintained its value throughout the decades.
According to a report by Gold Hub, from 2010 to 2020, the gold price rose by 90.91% from USD 1087.50/oz to USD 2076.15/oz. It means if you had invested $100 in gold in 2010, you would get $191 in 2020 almost double your investment. Need more reasons?
Here are the top 7 reasons why you should invest in physical gold bullion:
1. It Is the Oldest Form of Money
Gold is the oldest and one of the initial forms of money. Its usage as money is at least 3000 years old. On the other hand, one of the earliest currencies, the British pound sterling, is around 1200 years old.
Although it is not used as a currency today, its value makes it superior to any other currency.
2. It Has No Counterparty Risk
Gold is one of the few financial assets that does not need any other entity’s liability. You can buy gold without any paper contract or contractual obligation. Gold will always retain its value. It cannot go valueless. It has never happened in human history.
When a crisis hits, gold will be the last man standing. Having this powerful commodity in your portfolio will help you in times of economic or geopolitical uncertainty.
3. It Is a Tangible Asset
If you buy gold bullion, you can physically hold it, which you can not do with any other investment. Gold is a maintenance-free commodity, and it can’t be destroyed by water, fire, or even time. It can be easily melted over a flame, making it easy to work with and stamp as a coin.
Gold being a tangible asset has another advantage in this digital world—it can not be hacked. Unlike bank accounts and various payment services—credit & debit cards—gold is out of reach from digital thieves.
4. It Is Liquid & Portable
Gold is highly liquid. It means gold is easy to sell and convertible into cash. You can take gold with you to almost anywhere in the world. It can always be exchanged for goods and sold for hard cash. You can sell it to any gold bullion dealer in the world, a private party, a coin shop, etc.
Selling gold is generally quicker than selling any other investment. Collectibles—vintage items, artworks, etc., also take longer to sell. These have a very limited customer base and more likely involve a commission.
5. It Protects your Stock Market Investments
Gold hedges against inflation because its value is not influenced by the market. Inflation can decrease the spending power of any currency, but gold offers a hedge against that loss. Over the past few years, investors have seen the fall of the stock market during high-inflation years. But gold prices always soar.
Investing in gold helps you diversify your portfolio. It acts as a barrier to protect you against the fall of the stock market and other investments that are fluctuating in nature.
6. It Offers Stronger Protection than other Precious Metals
Other than gold, various other precious metals—silver, platinum, palladium, etc.—are available for investing. But still gold offers stronger protection in any economic uncertainty.
This is because almost 50% of silver and 90% platinum and palladium are used in the industrial sector. It means economic health will impact their demand.
7. It Is more Reliable than Cryptocurrency
People also value gold because it’s a source of financial security. It has been tested many times over the decades. On the other hand, cryptocurrencies—Bitcoin, Dogecoin, Ethereum, etc.—have a short history.
These haven’t been around during a major financial crisis. So, we do not know how these will perform during any financial crisis.
Unlike any other unstable asset, gold has always maintained its value in the long term. This commodity will act as an insurance policy for your future endeavors.
Investing in gold adds diversity to your portfolio. It protects you against any economic crisis. It helps you cover the loss of bonds, mutual funds, stocks, and various other investments.
So, make a wise decision and get your Bullion Box Subscriptions today.