If you are unsure whether investing in gold is still a good idea, you’re not alone. The key is to get properly informed and know your options before doing something like that.
People are rightfully cautious when it comes to finances, and maintaining financial security is something worth thorough consideration. You need to find a good way to do it.
Let me answer the above question clearly before going any further. Yes, investing in gold is still a good idea. In fact, with the IRA (investment retirement account), doing this has never been easier.
But, one question still remains.
Why is this such a good option in the first place?
Let me offer you a couple of reasons.
#1. It Holds Its Value
No matter what the world brings upon us, some things remain unchanged. One of those is the value of gold. Paper currencies tend to fluctuate and it’s not uncommon to see them lose their value.
However, gold has been held in high regard since as long as you can remember. And even long, long before that… It has always been seen as a way to preserve wealth and pass it on from one generation to another.
Among other things, this value has to do with the quality of the material. It doesn’t corrode and it is fairly easy to work with, which means that it can be melted and stamped as a coin.
The great thing is – this quality cannot change over time. I suppose that it is pretty clear now why it has been able to hold its value throughout history and why it will continue to do so.
#2. It Is An Inflation Hedge
We all know what inflation looks like and how it feels. What you might not have known, however, is that gold has served as a great inflation hedge throughout history.
I believe this is one of the main reasons why people stock up on it nowadays. But, you might wonder how this all actually works during inflation.
Here’s a useful insight on this whole topic: https://www.thebalance.com/should-you-buy-gold-3140477
Now, let me explain this link with inflation. I won’t bore you with all the details and I’ll try to be as straightforward as possible. Simply put, when the cost of living rises, the price of gold also increases.
So, owning it in those times would give you a great advantage. When you think about it more closely, you’ll see that people tend to buy gold when they notice their local currency losing value.
#3. It Is a Crisis Commodity
This might sound similar to the above point, but it is actually not that serious. Although, periods of crises can really be a big financial burden to all of us. And, once again, gold comes in handy in those times of geopolitical uncertainty.
In short, when people start losing faith in their governments, the price of gold starts to increase. This is why it is often called a “crisis commodity”.
#4. It Is Experiencing a Supply Shortage
Don’t worry; this doesn’t mean that it is disappearing. However, its production from mines has been in decline.
Could you guess what that means?
It’s common sense and you don’t need to be a genius to figure this out. Let me give you a hint there. When there is a shortage of supplies, prices are bound to rise.
Okay, I guess that wasn’t a hint – it was the whole point. Useful content.
#5. Its Demand Is Increasing
Unlike the production, which has slowed down, the demand for gold is definitely not in decline. In fact, the increased wealth of emerging market economies has brought about a boost in demand.
This growth in demand has also been seen among investors. I suppose I don’t need to spend a lot of time explaining what happens when the demand increases.
Once again – use your common sense and think of its price. It will also rise – there, now everything is clear.
As you can see, gold can really be a useful investment, since its price tends to adapt and increase as a response to certain events that cause the value of fiat currencies to decrease.
Furthermore, history has proven that it will never lose its value.
This makes it the perfect way to ensure financial security.