Gold is a particularly popular investment in times of uncertainty. Many people have asked us questions along the lines of “why invest in gold”. So we went around and interviewed a number of seasoned gold investors, and here’s what they have to say:
Gold is great for diversification
Gold has historically performed quite differently to other financial instruments, and they typically don’t react to the same market conditions that affect stocks, bonds and property. As such, having a small investment in gold can improve the overall diversification of your portfolio.
Gold has relatively good liquidity
Unlike many investments, gold is being traded continuously around the world. What this means is you can easily buy or sell gold investments at any time. This is particularly useful if you find yourself in a position where you need cash. Contrast this with investing in a property – that can take months to sell.
Gold as a hedge against inflation
Gold is more than just another investment. Investors sometimes refer to gold as a form of currency. However, unlike the typical currency, which governments can choose to print more, the value of gold is independent of any government laws. Because the supply of gold can only increase slowly, gold prices tend to not fluctuate much over decades.
Gold protects against uncertainty
Looking at past performance, gold is one asset class that has performed well during times of uncertainty. For example, during the 2008-2009 financial crisis, gold prices spiked when the stock market crashed, as investors panicked, sold their stocks and bought gold. This occurrence was also seen in the dot-com crash (2000), and several other bear markets in the past.
So there you have it – 4 good reasons for investing in gold.
Keen to get started? Want to know which bank offers the best gold investment account? Check out iMoney’s Gold Investment Account Comparison Table Now!