9 Nov 2015

The Pros and Cons of Investing in Gold

In 570 BC, in Lydia, under the ruling of the famous King Croesus, the first pure gold coins were minted and used as the means of payment. Before that, the gold coins were, actually, the alloy of gold and silver. The name of King Croesus was mentioned to describe somebody very wealthy and rich. Even today, a gold bar seems to be carrying a lot more meaning than the banknotes in the same amount. There is something about the gold that people love. However, emotions on the side, investments need to be based on rational decisions. Therefore, here are some reason pro and against investing in gold.

Secure Investment

There are different ways to invest in gold and it seems that the most convenient way to do so is to buy actual gold bars or jewelry. You just need to learn all you can about types of gold. The first strong point that comes up when people discuss investing in gold is that it is resistant to market swings and natural disasters. Storms, droughts and floods cannot hurt it. Moreover, it is not a business that can fail or disappear. The gold market is here to stay.

Diversifying Investments

There are rarely any other materials or other types of investing opportunities tied to gold. Therefore, investing a certain amount of your funds into it will definitely mean that you will be diversifying your investments. By purchasing 100 oz pure gold bars, you are securing your portfolio and your money.

On the other hand, not everything about gold is so shiny and perfect. There are reasons not to invest in this material just as there are reasons to invest in it.

It Doesn’t Make Money

Surely, it will not be prone to aging and damage, but also, it will not move for the best either. Your investment will be relatively secure, but gold will hardly earn you more money than you have in the moment you purchased it. Therefore, this is an investment that is more likely to save your money than to make more of it.

Markets Can Be Volatile

At the moment, the gold market has the highest value it has ever had until this moment. However, with the higher stakes, the risk factors increase as well. Therefore, while gold is one of the most secure investments, the precious metals market is different from what it used to be. With that in mind, it is advisable to keep your eyes open for high risk factors that might be present in the gold market today.

There are many more reasons for and against choosing gold as your investment. Just like with all other investment choices, you need to weight out your pros and cons carefully. However, one thing is true, historically, people have the emotional connection with gold and its shine. So, if you plan on having your money saved and preserved with a minimum of risk, turn it into gold.

 

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