8 Reasons You Should Consider Investing in Gold

January 5, 2023

8 Reasons You Should Consider Investing in Gold

8 Reasons You Should Consider Investing in Gold

Political and economic tensions, wars, and nationalism aren't just hot news topics. They can affect your investments in a number of ways.

Investing in the popular commodity gold is one way to protect yourself from currency wars and other risks that can cause currency devaluation.

The following are eight reasons why you should consider investing in gold.

1. It's Safe

Gold Bars in Vault

Gold is considered a safe haven in times of crisis or economic uncertainty. Economic crises, war, and political tensions can cause a devaluation of the currencies that people use to pay for goods and services.

When this happens, it affects how much money people have available to spend and can hurt a company's financial performance. Gold, often used as a hedge against inflation and currency devaluation, has long been considered a safe haven when other investments are at risk.

2.Diversify Your Portfolio

Gold offers diversity to an investment portfolio. Portfolio diversification is important in today's difficult market conditions because it can help reduce the volatility of returns on your investments. By adding gold to your portfolio, you increase its diversification and lower risk exposure.

If you decide to add gold bullion coins or bars to your investment portfolio, consider only buying from reputable dealers and distributors and taking physical possession in order to avoid any future problems with mail delays or property confiscation in the event that the US government were ever to seize privately-held gold again (which it did in 1933 following the Great Depression).

Recommendation: BUY & Store Your Gold Safely with a Gold IRA with Goldco.

3.The Prices Keep Rising!

Gold has shown a rising price over time. Historically, gold is considered to be one of the best ways to preserve and grow family wealth over generations-even centuries.

The best way to understand why gold coins and bars make such an effective hedge against inflation and currency devaluation is by looking back at what could happen when countries abandoned the gold standard:

In the early 20th century, for example, after WWI, Germany's economy was left devastated and its government was burdened with enormous debt. As part of its plan to recover financially, Germany abandoned the gold standard in order to print money freely in order to pay its debts. This led swiftly to high inflation that reduced German citizens' buying power and savings.

The resulting economic crisis caused political problems that ended with the rise of Hitler and WWII, which further reduced Germany's ability to produce and maintain a sound currency.

4.Gold Has Been Used As Currency For Centuries

 Gold has been used as money for thousands of years; it is universally accepted. If you want to purchase goods or services from other countries, gold coins and bars are considered "money" in every country including the United States (despite our abandoning the gold standard).

So whether you need things like food or fuel or if you just want to buy land or invest somewhere else, gold's value will be recognized everywhere, making it easier for you to liquidate your assets.

5.It Outperforms Other Investment Types

Although there is no guarantee that an investment in gold bullion will increase in value, gold has shown a long track record of out-performing other types of investments.

During the stock market crash of 2008-2009, for example, gold prices actually increased as stocks and real estate decreased.

Between January 1971 and December 2019, gold had average annual returns of 10.61 percent, which was only slightly behind the return of commodities, with 10.69 percent average annual returns.

The annual average return of gold in 2020 was 24.6 percent, which was the second highest return among a range of assets that year, followed by silver which had the highest.

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6.It's An Excellent Hedge

Gold is recognized around the world as being one of the best hedges against economic uncertainty or disasters-including war and its aftermath.

If you're concerned about what might happen during periods of global crisis with regard to access to food, fuel supplies, healthcare resources and more, gold makes an excellent way to ensure that you'll have enough money if disaster strikes-and not just in local markets but also at stores throughout the world where goods are traded in US dollars.

Following the attacks on 9/11 and Hurricane Katrina, for example, gold prices increased significantly.

7. You don't need a lot of money to buy gold

Yep, it's true -  you can actually start investing today with just $25 because some bullion dealers offer small minimum quantities that you can purchase (for example, 1 gram or 1 oz).

Also, consider that the average cost of an engagement ring in the US is now over $5 000-and if not purchased as an investment but instead simply to show your love and commitment to your partner, why would anyone spend this kind of money on something that has no intrinsic value?

With gold and other precious metals including silver and palladium, however, you will be investing in something that increases in value as well as becomes a family heirloom that can be passed from one generation to the next.

Gold prices are expected to continue rising as global economies experience increasing problems including growing debt levels, currency inflation, and more. In fact, some experts predict that gold bullion could reach $5 000 per ounce or higher within the next few years.

If you want to sell your gold at that time you'll receive a much better price if you're not in a hurry and plan ahead for this possibility.

There is no particular reason why physical possession makes sense only when gold prices are high; rather, it's precisely because of concerns like these that buy-and-hold investors seek safety (a hedge) in the form of physical possession of their gold, silver, and other precious metals.

Gold is a great way to ensure your overall financial portfolio: When you hold physical gold bullion coins or bars in your possession, you'll have protection from inflation and from the declining purchasing power of fiat currencies such as US dollars.

In fact, many investors consider their gold investment to be the foundation of their financial plan-just like having insurance on a house-because it can help protect them during uncertain times.

You don't have to understand all the complexities of the global economy in order to benefit from investing in physical gold, silver, platinum, and palladium.

All you need is a desire to take responsibility for your own long-term financial planning and a willingness to start acquiring some of this precious metal for yourself today if you haven't already done so.

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About the author 

Jenna Lofton, an expert in stock trading, investing, and financial planning, combines over a decade of experience with rigorous academic training. Holding dual MBAs in Finance and Business Administration from the University of Maryland, Jenna's expertise is grounded in a deep understanding of the financial markets. Her career, which started on Wall Street, has evolved into empowering others through her insights and analyses in the dynamic world of finance.

Based in New York City, Jenna's approach is informed by her hands-on experience as a former financial advisor and her keen observation of market trends. She is known for translating complex financial concepts into actionable strategies, making her a valuable resource for both seasoned investors and newcomers to the stock market. Her commitment to financial literacy and her ability to demystify investment principles have made her a respected and authoritative voice in the investment community.

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