Gold has long been seen as not only a sign of wealth, but also a stable investment in times of market volatility. Buying gold is considered as a hedge investment. If you’re asking yourself “should I buy gold,” you should first explore what this means.
Describing gold as a “hedge investment” means that it is a safe haven for investment money because it protects an investor’s funds against inflation. At times when the market crashes, gold investments can be one of the only possible investments that actually increases in value.
Nevertheless, there are many detractors out there to investing in gold that you’re likely to become aware of if you ask yourself the question of, “Should I buy gold?” Some consider buying gold to be an obsolete form of investment because gold is not as valuable in our everyday lives as it once was.
Yet there are some important pieces of information to consider before you entirely pass on the possibility of investing in gold. An especially important statistic to consider is the fact that very early in this century, the value of gold rose enormously over a very short period of time. The value of gold in 2008 was almost triple the value of gold in 1998, only 10 years earlier. This means that those who invested in gold in 1998 could have tripled their investment by 2008. In fact, gold continued to rise after the 2008 recession and peaked at $1,921 an ounce in 2011.
Understanding the Benefits of Investing in Gold
Clearly, buying gold can be a profitable investment if you do it right. The following are four things to keep in mind to successfully invest in gold:
- Many investing authorities recommend that every investor’s portfolio include some gold. Most investing authorities recommend that one keep a diversified portfolio. This means having a variety of different types of investments. If you invest in gold, you’re investing in a commodity. If your portfolio doesn’t include any commodity investments, you might want to consider buying gold to diversify.
- Gold tends to be a safe investment when inflation occurs and stock values go down. With almost any market crash, there comes a corresponding rise in the value of gold. You should be aware of this if you’re asking yourself, “Should I buy gold?”. This means that possessing gold can help you to alleviate some of the losses you may experience in the event of a crash. Any world event that has the potential to drive down stock prices typically also has the potential to drive up gold values. As inflation rises, investing in gold is a good idea to protect one’s portfolio.
- Gold is a finite material with value. There is only a limited supply of gold in the world. Gold is valuable in several ways. It is valuable as a material used in jewelry. However, this is not the only potential value of gold. This precious metal is also useful in numerous industrial applications because of its unique makeup and characteristics.
- Gold is internationally valued. One big advantage of gold that’s different from other commodities is that it is highly valued basically all over the world. This means that it can be exchanged for cash in many different countries and on many different markets.