Gold was thought-out to be a universal currency for many years. In 1944, after the Bretton Woods Agreement, dollar substituted gold as an anchor currency. However, gold continued to be used to give a lift to various countries’ local currency.
Gold as a Form of Investment
Although gold is no longer used as a standard form of currency internationally, it still remains to be a preferred investment choice for many potential investors. Below you will find some of the reasons that make gold a better investment choice in 2019.
Gold is believed to be one of the most liquid assets as it can be conveniently converted into cash whenever and wherever required. Similar to cash, the liquidity and acceptance of gold is incomparable and you can sell it instantly whenever needed.
Maintains Its Value
Unlike other investments and assets, gold tends to hold its value over the passage of time. Economists believe that even the gold price is not able to signify its real worth, meaning if the gold price drops, the primitive gold value doesn’t vary a lot. This is mainly because unlike dollar that holds no inherent value, there is a fixed quantity of gold.
Gold prices generally increase when your local currency loses its worth and inflation takes hold. As gold is valued in dollars, any decrease in the dollars price will trigger raise in the gold prices. Thus, because of its stability, gold can act as a better investment option than its counterparts.
Gold is a simple and effortless way to expand your investment portfolio. You can significantly reduce the overall risk of your investments through portfolio diversification. Since, gold generally moves in reverse to the futures market, it’s relatively easier to diversify with gold than other investment options.
Gold can be used as an Input for Other Products
As gold is used to produce other products like jewelry, there is a significant need that also readjusts the gold prices.
Why Are the Alternates to Gold Investments Failing in 2019?
There are numerous reasons that make gold investment better than other alternatives like stock, forex or bonds.
When we compare gold with other investment options, gold is popular worldwide because of its hedging capability. As we know that each year the cost of goods and services rise due to the increase in inflation. This rise in prices negatively impacts our purchasing power. Since, gold maintains its value, it is said to be the hedge against inflation.
There are Number of Ways to own it
This is one of the most important aspects. Yes, there are multiple ways to own gold. For instance, you can buy gold coins or bullions. You can even invest in gold securities that enables you to trade that security in which acts similar to owning any tangible asset.
Maintains its Worth
There can be a decline in gold prices but one thing is certain that it can never be worthless. In fact, it always gets back its real worth after some time.
The Best Time to Invest in Gold in 2019
The ideal time to invest in gold is when inflation takes hold and demolish the worth of the local currency. The sooner you can identify such plunges, the better you would be able to take advantage of it. Prominent market indicators such as political disturbance and shares market fluctuations may signify the expected devaluation of your national currency.
Noticeably, when national currency is powerful and inflation is in control, there is very little chance for the gold prices to increase.
How much Gold You Should Buy?
Well obviously, there is no fixed rule as to how much quantity of gold you should buy in order to diversify your investment portfolio. This will depend on your market understanding, your ability to bear losses or your overall financial requirements.
Gold is one of the few investment options that works great even in a bear market. Ideally, you should use the effective portfolio management techniques for allotting gold as for buying other investments.
Ways to Invest in Gold
Buy Coins or Bullions
You can purchase gold coins or bullions which can be sold afterwards. Although, it may sound great to have gold as a physical asset, you have to get it insured and pay for it.
Buy Stocks in a Gold Company
You can be a shareholder in a company that deals in gold. The share value will depend on the gold value itself.
Invest in an Exchange-Traded Fund (ETF)
A Gold ETF is a fund that deals in a variety of gold securities. As ETF is a great way to diversify your investment, it also minimizes the risk of loss.
When it comes to long-term investment, gold is certainly the best option – and continues to be, this year. If you’re interested in latest monetary news including the inflation status or devaluation of your local currency, you may want to include gold to your investment portfolio.