Are you wondering whether you should invest in gold bullion or not? Well, it’s only natural and prudent for an investor to think about the pros and cons of a particular asset before investing in it. Well, you are bound to question the integrity of your gold investment especially because gold is an inert metal and doesn’t earn interest for you. Value appreciation of Gold is your income from your Gold investment. However, the reasons for you to buy gold are many and go way beyond the possibility of appreciation in the value of Gold. Investment in Gold offers distinct benefits, unlike any other investment options. Investment in Gold is a significant part of any strong portfolio.
Here are the top 8 reasons you should buy gold bullion.
Gold is a tangible asset: Physical Gold is not exposed to the risks that the paper assets such as bank accounts, payment services, and brokerage accounts are exposed to. Physical Gold cannot be destroyed or hacked. In today’s world, it’s only wise to have some of your wealth outside the digital form. God forbid, if someday internet comes down crashing, your wealth in the form of tangible Gold will be your saviour. Gold is not just like any other commodity. It cannot be used up completely like other commodities such as oil or diesel. As a matter of fact, every single bit of Gold that has been ever dug up remains in existence. Gold’s’ job is not to produce income but to act as a store of value and to act as money.
Gold in money: Even though Gold is not used as a currency today, what makes it superior to money is its role as money. Gold has been in existence, and it has been seen as money longer than any currency in the history of money. For more than 3000 years now Gold has been a long-term store of value, however, one of the longest known currencies of the world, the British Pound Sterling goes back 1200 years. History shows that the United States of America has used Gold as currency more often than not. Over the years all major currencies have lost major purchasing power in comparison to Gold. Even though the price of Gold fluctuates, its value is timeless.
There is no counter-party risk attached to Gold: If you hold Gold, then you will not require any paper contract to make it whole. In order to fulfil a contractual obligation, you will not require any middleman or third party. This holds true because unlike other financial assets, Gold is not simultaneously any other entity’s liability. Gold will never go zero. It will always have value. You can sell Gold anytime you need currency. That is a feature that makes Gold unique and powerful as an investment.
Gold is portable and liquid: Gold is easy to sell and thus is highly liquid. Every bullion dealer in this world recognises Gold and will buy it from you, if you wish to sell it. You can easily sell Gold at a pawn shop, local coin shop, an online Gold dealer, or a private party. You can easily trade Gold for currency or goods. The process of selling Gold is faster than selling a stock lying in your brokerage account, which takes about three working days before it can be converted to cash and transferred to your bank account. You can carry Gold all across the globe.
Gold can be private: In the world of digitalisation, Gold is one of the very few assets that can be kept private and confidential. Gold can be kept anonymous if you choose to do so. Nobody has to know that you own gold if you don’t want them to know. Almost no other investment you make offers such an advantage. However, you have to declare any gain on your Gold and pay taxes accordingly.
Gold is low maintenance: Gold is easy to store. Even though professional storage comes with a fee, vaulting charges are usually low. You can simply lock away your Gold till the time you need it. The costs associated with Gold are substantially low in comparison to other tangible assets such as real estate. You can also secure Gold at your home. Gold is very value dense. You can store a high-value Gold in a small space. Gold storage is easy, low maintenance, and low cost.
Gold is a rescuer in times of crisis: Whenever a financial crisis hits you during the periods of geopolitical, economic and monetary crisis, the role of Gold can conveniently shift from a defensive tool to an offensive profit machine. Whether a stock market crashes or a brutal economic event alters the livelihood of the country’s citizens, it is Gold that acts as a natural safe haven. The precarious nature of our monetary, economic and financial systems today has gifted gold a massive growth potential. In our world of accelerated risks on multiple major fronts, Gold has offered greater safety, lower risk, and a bigger upside than any other investment.
Hedge against inflation: Historically speaking gold has been known to excellently hedge against inflation because when the cost of living increases the price of Gold tends to rise. During high inflation years in the last five decades, the Gold prices have substantially increased.
The bottom line is even though Gold can prove to be volatile in the short run it has never failed to prove its worth in the long run. Hence Gold should certainly be a part of your diversified investment portfolio, especially because when the value or worth of paper investments such as bonds, stocks, decline as a result of a major economic, monetary or geopolitical event, gold prices increase. The benefits associated with Gold make it an investment worthy of due consideration. You should consider including a sensible and prudent amount of Gold to your portfolio because remember physical gold cannot default on obligations and promises or go bankrupt.