Gold investment, irrespective of its form, is among the top choices of people. It is an evergreen investment option that has interlaced itself into cultures and cultural norms. For instance, during many festivals in India, it is considered good luck to buy gold on an auspicious day. Indians around the world will buy at least a 1 gram gold coin as a customary ritual. Over the years, gold investment has undergone dramatic changes that have affected its market value and the way it is perceived by investors. People interested in buying gold, choose to invest in it via exchange-traded funds (ETFs), gold miners’ stock, or physically buy gold bullion. Through gold people have been able to create a diversified investment portfolio.
There are many critics of gold investment who will debate over the returns gold gives and the hassle it can be to dispose of gold bullion, especially in its heavier form. However, they haven’t been able to dent the popularity of gold as a wealth-creating asset.
Gold over the years
Historically, gold has been used to make jewelery first and later in the form of money. Gold was accepted and recognized as a highly lucrative investment option around the world and when the world moved to paper money, these were also backed by gold reserves. Over the years, as we move into modern times, paper money has now become fiat money, that is, it is no longer backed by gold. However, gold endures as a sign of wealth and is an important part of the world economy. The world’s largest financial organizations and central banks carry almost one-fifth of the gold reserve and constantly endeavor to procure more. Today, private investors who purchase at least 1 gram gold coin will earn better returns than those who keep their cash in the bank or in fixed deposits.
Gold for wealth preservation
Gold is a safe haven investment as its value holds strong in the face of the toughest markets. all other investment classes come with inherent risk even though the returns may be higher, but gold has had steady growth over the years. The past two years of the pandemic which continues to hold the global economy in a grip of uncertainty has seen markets collapse and prices fluctuate wildly across all industries. Investors who were smart enough to have a sizeable proportion of their savings in gold are benefiting from their decision. Gold is an enduring way to preserve and store wealth. though gold does not offer much liquidity, its value multiplies over the years and US$100 invested in gold 10 or 20 years ago has multiplied significantly in value in 2021 compared to the money being saved in currency form.
Benefits of Investing in Gold
Investing in gold is beneficial for short- and long-term goals. Gold is a low-risk investment, and one will never observe large fluctuations in prices as we do with other investment vehicles such as stocks, bonds, or mutual funds. The price of 1 gram gold coin will increase at an even pace over the years. Even when the market falls, gold investment generally holds its value, and its price will never fall below the price one paid for it at the time of purchase. Gold value is not swayed by inflation, changing government policies, or socio-economic interactions.
Gold stabilizes the portfolio as its price increases as the dollar price decreases. There is no capital gains tax attached to the sale of gold coins, whether you sell 1 gram gold coin or 1 kg gold bar. Furthermore, many gold coins have a premium as collector’s items based on their design or year of mint.
In these times of pandemic if you are feeling the pressure of economic uncertainty, add some gold investment to your portfolio. Savvy investors recommend 5% to 15% of the portfolio investments in gold. If you are creating a retirement fund, then start storing a part of your savings in the form of physical gold in IRS-approved storage facilities. 1 Gram gold coins can be stored more easily and discreetly than bars in smaller sizes. Ensure that the gold you invest in is from popular mints.
