Investment in various assets is a thing that has been going on since time immemorial. People have always wanted to secure their future and so they engage in present activities that have future benefits.
For instance, in the past, ownership of vast amounts of livestock and land was a sign of wealth and prestige in most parts of the world.
Precious metals like gold and silver were held in high esteem and large amounts were being controlled by the rulers. This resulted in very powerful kingdoms since the precious metals were the most valuable currency for trade.
They could be used to pay soldiers, buy goods, and so much more. Today, gold is still held in high esteem and hasn’t lost its worth. Although the use of paper money is the most fundamental means of trade, gold still holds much more value than cash. With that said, learn here a few benefits.
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It is not affected by inflation
One major drawback to saving lots of money in the bank for future use is inflation. The value of that money today won’t necessarily be the same tomorrow.
It might be worth a lot at the present and then as time goes by the value drops thus making you incur a great loss. Gold, on the other hand, remains of high value whether there is inflation or not.
It is a scarce metal with lots of great uses and so people are always going to be in need of it. This makes it a great asset to buy as it insures your investment against inflation. Even if you leave it there for 50 years you won’t have to worry about its future value. Click here to see a few reasons why you would want to invest in gold.
It is easy to trade
Most long term investments are usually not easy to trade. This is because they come with great risk hence buyers have to be extra careful to make sure that they are getting their money’s worth.
Take for example, real estate. One has to conduct inspection prior to buying to make sure that the property is in good condition. Still, there are some faults that might be hidden only to surface in future and cost you lots of money.
There are also lots of things that could go wrong legally speaking. With gold, however, the process is not that rigorous. There are plenty of buyers and sellers.
Although there is the issue of mistakenly buying fake bullion, such risks can be easily avoided by buying from legitimate sellers like banks. You will be issued with a certificate as a proof of quality.
Maintenance is easy
After buying the bullion all you have to do is ensure that you keep it safe. Thieves are always looking for valuable assets and are willing to go to great extents just to get their hands on your gold. This is one huge risk that comes with buying precious metal and keeping it yourself.
There are 2 ways of storage available for you as a buyer. You can decide to have a custodial agency store it for you at a fee or you can choose to have the gold given to you then you decide to store it whichever way you see fit.
If you opt for the latter option make sure that you put it in a secure place where intruders can’t get to it.
Keeping it in your home would be a bad idea unless you can ensure tight security with constant monitoring and surveillance. Paying for secure storage facilities is a much smaller cost to bear than losing all of your investment.
It is flexible
Just like cash, bullion is flexible because you can take a small part of your investment and use it when you are in need. If your investment was a piece of land this would not be a viable option.
You would have to demarcate a small piece, find an interested buyer, and then do the appropriate paperwork to relinquish your claim to that parcel before they give you the money that you need.
This can take months and in the end it will also reduce the amount of money that you get from your whole investment. In contrast, bullion is flexible since it is available in a variety of sizes.
You can buy large bars for long term investment and small ones for the short term. You can also purchase gold coins. These are easy to use for trading. You can sell them and get the money in a short time or you can directly trade them for what you need as long as the deal is right.
It can be used to acquire a loan
Lending agencies such as banks require that you provide an asset that can be used as a security before they give you the loan.
If you fail to pay then the asset stated will be sold and the money used to finance the loan. At times it can be hard to get a loan if the agency decides that the asset you have is not viable for use as security.
This is determined based on various factors such as the value of the property and whether it is depreciating or appreciating. In terms of value, the stability of gold is at a high percentage hence it qualifies as a viable security.
When you find yourself in urgent need of money you don’t have to sell your bullion. Just use it to acquire a loan from the bank.
It diversifies your investment portfolio
It is always good to have more than one form of investment. That way, if one experiences losses the profits from the others can cover the gap and cushion you against the hard times.
Since gold is stable and has a high value, having it in your portfolio automatically boosts the overall value and provides insurance.
Some investors buy bullion for the sole purpose of countering the risks associated with the stock market. See this link to read more on the advantages of owning gold https://www.thebalance.com/pros-and-cons-of-owning-assets-like-gold-1290619
As opposed to in the past when a very large percentage of the gold available was being controlled by the rulers, in these modern times it is highly decentralized. Anyone can buy and keep them wherever they see fit. However, it is advisable that you have them stored in a secure place meant for the purpose of doing so. There are dedicated facilities that only store precious metals. These are highly guarded 24/7 and also have state-of-the-art security systems put in place. The benefits of buying gold are many and go beyond just being in possession of a highly priced ornament. When buying, be sure to ascertain its quality first.