Since the very beginning of the 21st century, we’ve witnessed some of the most unpredictable years, with the economic dynamics going crazy. The bitcoin price went berserk, jumping to the price of $5,000 before falling down to $3,000, and then settling at $4,000. With currencies jumping around (although the current fiscal year has been a lot more stable than the previous one), people wonder how they could secure their assets through investment. One of the most well-regarded and reputed currencies is gold, and people invest in it to diversify their investments and create a safety net (in case one of their investments doesn’t go well). Let’s find out what are all the supposed benefits of investing in gold.
1. Immunity against inflation
If you keep your money in a bank, it may be safe from robberies, but it isn’t from the overall state of the economy. Your money can lose its value, and one of the alternative options is gold, because its value is constant. The value of gold is constant because there’s a limited amount of it on the planet. There’s always going to be the need for it, even though prices may vary due to demand. Because China entered heavily into the global economy, the value of the US dollar is on the decline. On the other hand, commodity prices have been on the rise and are going to continue. This makes gold a great long-term savings option.
2. Use for products in different industries
Gold is used for making jewelry and accessories, but it’s also used in the tech industry as a component for different electronic devices (e.g. as for conductive nanoparticle ink for plastic electronics). This enables you to go into individual deals with particular organizations and hedge your assets on these deals – buy gold and follow the dynamics of the tech market. As the tech gets more present and more complex, the need for gold will only rise – you can provide it when there’s a spike in the demand, and always get a good price.
Once you diversify your options, you create several separate streams of income as portfolio options that surely won’t sink one another. This will ensure that you’ll still be able to make money, even if one of your savings or investments goes down the drain. Gold prices and value aren’t related to other types of investing and savings, which makes it a perfect choice for diversification.
4. Banks can fail
Everyone should have a backup plan, due to the fact that banks are institutions that could fail because of an economic crisis. And once large banks fail, all the others do too. It goes the same for national currencies and banks, and as history has taught us, whole countries could collapse in a matter of months. In these kinds of situations, you’ll know why a gold bullion is a good alternative currency.
5. Easy to liquidate
What is the point of a currency if we’re not able to use it? With gold, however, things are different, because it’s very easy to liquidate. Gold is a universal currency that’s widely recognized and highly sought-after, so you can exchange it for goods, services, or typical currency throughout the world.
The inflation is probably the best indicator that you should invest in gold; however, there are no rules as it’s pretty much a solid and stable investment at any moment. In case of inflation or some other kind of national or world economic turmoil, when you notice that the national currency is losing value, take 5-10% of your assets to buy gold, and put it on the side for a more secure future.