Investing In Gold: Is It Still A Good Idea?
For ages, gold has been able to retain its value and beat inflation in terms of returns. It is one of the most stable assets of our times. That is why, in spite of the run-up in gold prices in the past five years, it is still a good investment for a wide variety of reasons.
We will today share with you the reasons why you should think about investing in gold.
1. Hedging an asset
Hedging is the process of offsetting the losses in other investments with a stable and positive investment. Since gold has primarily retained its value, you can invest in gold as a hedge. Many investors who believe that the US dollar will continue its trend of losing value; buy gold as a hedge to US dollar. It ensures that the buying power of their money is well maintained.
Similarly, gold can also work as a hedge against inflation. It will protect the power of your money. When you sell gold a few years down the line, it will fetch you more US dollars which will allow you to buy some stuff with that if not more. That is why; it can work as a hedge against other assets and also as protection against rising inflation.
2. Safe Haven
Gold is known to be a defensive investment. Whenever there is turmoil or economic upheaval, the prices of gold increase. That is why; in case of any crisis your money will be completely safe in gold. If you have invested in gold in advance, you can be sure that the value will be retained. It is the primary reason why you should think about investing in gold.
During situations like the 2008 economic crisis, the value of gold can increase which will help you not only gain good returns but also ensure that your capital remains protected.
3. Direct investment
When you look at the price movement in gold over the last few decades, you will realize that as an investment as well, it has sealed good returns. Moreover, since it has an extensive history, you can be sure that it will hold value and fetch good returns. The low volatility in gold ensures that you can more or less protect the capital and gain upside.
4. Easy to invest
These days, technology has revolutionized the world of investment. As we speak, you can opt for self directed ira account for gold, which allows you to invest in gold in the digital form. You can either invest a maximum annual amount through this account or transfer the amount from your retirement corpus to this one. In addition to gold, you can invest in other precious metals as well. The procedure to open such an account is pretty simple and it will allow you to invest in gold right away.
5. Easy to liquidate
Unlike some of the other asset classes, gold is very easy to liquidate. When buying gold through any digital medium, a single click will allow you to liquidate it. Moreover, since during the crisis, gold retains its value or even moves higher, you can be sure that you can exit at a profit.
That is why, in spite of the run-up in prices of gold, it is better to think about investing in it. With the help of gold investments, you can easily save your portfolio and even earn some good returns during times of crisis. It will help you balance your portfolio and also have an asset class which can come in handy in difficult times.