45% of the world’s gold is kept by governments and central banks as reserves. The planet’s top governments continue to see gold as a valuable asset.
If you’re looking for new investment opportunities, it’s important to understand the benefits of buying gold. A gold investment strategy can lead to some great things and can be a tool to use when growing your wealth.
In this complete guide for new investors, we’ll look at the top 10 benefits of buying gold.
How Can You Invest In Gold?
Before getting into the specific benefits of investing in gold, it’s important to understand the types of gold you can buy and invest in. Here are some of the options that you might want to consider.
Gold bullion is a type of bulk gold that is in the form of ingots or bars. This type of gold doesn’t require as much processing when compared to coins and is a great choice if you’re buying gold in large quantities.
Gold bullion can range in size and weight by quite a bit, so you’ll be able to find a type of gold bullion that is right for your investment strategy. Gold bars will be certified based on weight and purity and will usually have a serial number as well.
This type of physical gold isn’t quite as liquid as gold coins since you’ll need to find a buyer who is willing to buy the exact size or amount that you have.
As opposed to gold bullion, gold coins are more flexible and convenient. They’re also a bit easier to find compared to gold bullion.
You can buy smaller amounts of gold by buying coins when compared to buying gold bullion. You can also choose to sell only some of what you own, and it can be potentially easier to find a buyer as well.
While there are many types of gold coins available, some of them can serve as collector’s items. This can add even more value to them.
While many people don’t consider gold jewelry to be an investment, the truth is that it’s a good option to consider if you’re buying physical gold.
Gold jewelry is readily available anywhere and isn’t very hard to find. This means that it’s a good choice for beginners in gold investing who want to get started easily.
However, when buying jewelry, it’s important to know exactly what you’re buying. Avoid fake gold or gold that isn’t 14k or higher. You’ll want to be sure that you understand what you’re looking for when buying gold jewelry to ensure that it will be a worthwhile investment.
In addition to buying physical gold in the form of coins or bullion, there are other ways to invest in gold as well.
Many of the benefits of investing in gold come from owning it physically, but there are still benefits that you can get from investing in other ways. Investing in gold funds, such as mutual funds and exchange-traded funds (ETFs), can be a good option. This can be more convenient than buying physical gold in some ways.
In addition to investing in funds, you might want to invest in stocks related to gold mining or gold futures and options. You should also consider opening a gold IRA.
Top Benefits of Buying Gold
There are many benefits of buying gold that you might not expect. Here’s what you should keep in mind when deciding whether investing in gold is right for you.
1. Gold Maintains Its Value
One of the top reasons to buy gold is that it serves as a store of wealth that has retained its value over the years.
Gold has played a role in currencies throughout history and has been seen as a valuable material good to possess. It’s seen as an unchanging asset that provides real value and will continue to in the future as well.
Because of its unwavering value over time, buying gold seems like a better long-term option for investing and storing financial wealth than other options.
Compared to fiat currencies, gold has a better track record and tends to fluctuate less over the course of time. That makes it a great choice for maintaining long-term wealth or passing wealth on to your heirs.
2. Gold Can Offer Protection During Uncertain Times
Gold can also serve as a way to reduce your risk during times of crisis and economic uncertainty.
Whether there’s an economic downturn or inflation is high, gold can be a safe investment that can help you get through it. If the US dollar goes down, then gold’s value is likely to still stay the same or go up. Gold prices tend to rise during a recession.
This makes gold well worth having available during these times. It can serve as a hedge against inflation and can help to protect you as the cost of living increases.
Even if the stock market goes down, gold is likely to stay the same or continue going up in value. This means that it serves as a good hedge against other stock market investments that you might be making and will serve to protect you in case they go poorly.
3. There Is No Middleman
An advantage of owning gold bars and coins is that there is no middleman to deal with. You won’t need to have faith that a third party will fulfill its obligations if they go bankrupt or default on the promises that they have made.
When you own physical gold, nothing stands between you and its value. Gold isn’t another party’s liability. If there are economic changes or if an entity goes out of business or goes bankrupt, you’ll still be protected.
Gold will continue holding value despite what happens in the economy, and there will be no counterparty to deal with. This makes gold a very attractive asset to have.
4. Gold Has High Liquidity
Another benefit of physical gold is that it is liquid and easy to sell.
There are multiple ways that you can sell gold jewelry, coins, and bullion, and different parties that you can sell it or trade it to if needed. You can easily go to a local gold dealer or sell your gold online if you choose to do so.
When selling stocks, you’ll often need to wait several days before you can transfer cash to your bank account. Collectibles and other items of value can also take a long time to sell, and there will be fewer people that you could potentially sell to for the right price.
When it comes to gold, selling is easy, and there are many places where you can do it. You won’t have a hard time trading it or converting it to cash when the time comes to do so.
5. Gold Offers More Privacy
One of the best things about buying physical gold is that it can serve as a more anonymous and confidential asset.
Unlike other assets and investments that you may have, banks and other financial institutions won’t know everything about the gold you own. You can buy and store gold anonymously if you choose to do so and without getting a financial institution involved.
For investors who are looking for a private and confidential type of wealth, gold can serve as a good option.
6. Gold Is a Hedge Against Digital Assets
As a tangible asset, physical gold offers some unique benefits.
There are certain risks associated with paper assets, and they can cause problems if not taken into consideration. Because gold is tangible, it can’t be hacked or changed in the way that a bank account or brokerage account potentially could be. You’ll be able to keep gold with you if you choose to do so and can always access it when needed.
Some people prefer to have some non-digital assets in order to protect themselves from potential cyber-attacks or other similar problems. Gold is one of the best tangible assets that you could own and can help mitigate the risk of keeping all of your assets in the digital space.
7. Gold Fees Are Minimal
Compared to some other types of investments, there are fewer fees associated with owning gold.
While it’s possible to store gold at home or on your private property, it’s usually a good idea to get professional storage for it. However, while there will be fees for this gold storage, there will be very few other fees that you’ll have to pay when investing in gold.
Brokerage accounts, on the other hand, come with lots of charges and fees to think about. Other investments can be costly as well.
Gold is a much more straightforward type of investment. There’ll be low maintenance costs, so you can be sure that buying gold won’t cost you much more than its actual value.
8. Gold Can Offer Protection Against Government Overreach
One of the major advantages of buying gold is that it can protect against government overreach.
In times of political turmoil, it’s possible that bank accounts could get frozen or funds could be confiscated. It’s in the realm of possibility that the government may pass laws or take actions that are problematic and that infringe on your rights and your investments. When the economy takes a turn for the worse, the risk that a government will meddle in a citizen’s private affairs rises.
By investing in gold, you’re more likely to protect yourself from government overreach. You can keep your gold at home physically without having a third party involved. You can also choose to store physical gold offshore in another country as well.
9. Gold Maintains Value Better Than Other Precious Metals
Even compared to other precious metals, gold offers some unique advantages. Because gold is used primarily as a valuable material rather than for industrial applications, its value won’t fluctuate as much.
Other metals are used primarily for industrial purposes rather than serving monetary needs. This means that gold is more likely to retain its value during an economic downturn. Other precious metals, including silver, will likely be affected by how much they’re in demand for industrial purposes.
When looking at the history of gold, it does a better job during stock market crashes and recessions and will likely continue to perform well in economic downturns in the future as well.
10. Gold Investments Have a Shorter Learning Curve
One of the top benefits of investing in gold is that there is a much shorter learning curve when compared to other investments.
It takes a lot of knowledge to trade stocks effectively. Dealing with collector’s items such as paintings can also take a lot of effort, knowledge, and experience as well.
While investing in gold, on the other hand, the process is pretty straightforward. This means that you won’t need to worry about getting it wrong or need to put in the effort to constantly learn new things and refine your approach.
Understanding the Advantages of Gold Investments
As you can see, there are many different benefits of buying gold. You’ll want to be sure that you understand these advantages when choosing your next investment.
Gold can serve as a stable form of value and can be a hedge against economic turmoil. It can also protect you from some of the risks that come with owning only digital assets and currency.
Are you ready to start investing in gold? Contact us today to learn more about how we can help you get started.