Why buy gold?

 

In a world where economic uncertainty seems to be an ever-increasing occurrence, investors are looking for low-risk investments that protect their money as much as grow it.  Their research often leads them to gold as the solution to that very problem.

They’re right!  But, new investors still can’t help but ask, “Why buy gold?”

Since the 2008 crash, the banking systems have seen irreparable damage to their reputation and, understandably, people have become more and more cautious about trusting their money with banking institutions.  If they lost it once, maybe they could lose it again.

The global economy had only just managed to feel a sense of recovery from this crash before suffering a shock once again with the outbreak of the Covid-19 pandemic.

Governments were forced to print unprecedented amounts of money in order to save stock markets and keep their economies afloat.

We are seeing interest rates at record lows, inflation is set to rise, living costs continue to rise while wage growth has slowed and unemployment has increased.  This all serves to fuel instability and cause people to lose faith in the places they keep their money.

Throughout all of this, gold bullion has managed to stay strong and maintain a high value.  Why?  Because it is the ultimate insurance investment in protecting your wealth and should be a key part of every investor’s portfolio.

Let’s break down some of the main reasons buying gold is a great investment.

The ultimate insurance

It is widely considered that owning gold is the best insurance for your wealth against difficult times.  It has been the safest method of investing your money for centuries, and even with the advancement in technology and the increasingly connected world we live in, gold remains the safest bet.

Gold bullion will always have value.  This fact alone means gold offers as much certainty as you can get for the protection of your wealth.

Buying gold is an effective way of hedging your portfolio against other investments as its price tends to soar when other markets, such as stock and property, are floundering.

The price of gold also tends to rise in line with inflation, making it an excellent insurance against economic factors such as interest rates, currency fluctuations, and of course inflation and deflation.

Gold is also an international commodity and a precious metal, meaning you can go anywhere in the world and it will have value.  A high value at that as every country in the world recognises it as a luxury.  And gold bars and coins are very easy to transport.

There is never really a bad time to own gold.  As a physical and timeless asset that is immune to devaluation in the way that money is by governments freely printing more.

In the unlikely event that the entire banking system failed, your gold bullion, particularly in smaller units like coins, will still have value and be tradeable for goods.