Gold offers investors numerous opportunities for increasing their cash flows. When we think of gold, many of us think of our wedding ring. Others may consider this material’s history of being a coveted metal. When it comes to your investment portfolio, however, there’s a lot more to take into consideration. Whether you’re new to investing or have long been experimenting with the many ways you can put your money to work for you, there are great reasons to seriously consider adding gold to your portfolio.
Good Performance During Inflation
Over time, inflation erodes the value of investment returns. This adds risks that many hesitate to take on. For this reason, smart investors put their capital in the safest investments with protection against inflation. Gold offers investors low-risk opportunities. This is because gold has historically done well during times of inflation. As the cost of living goes up, so does the value of gold. We’ve all heard of the inverse relationship between supply and demand. When supplies are low, demand increases. As demand decreases, supplies are able to increase. When it comes to gold, we’re talking about a limited resource. Furthermore, for a variety of reasons, the number of gold mines being discovered is shrinking. These include:
- Increasing costs associated with mining
- Decreasing exploration budgets
- Obvious and easy gold mines are already exhausted
It stands to reason that, with a decrease in annual gold production and rising demand, now’s a great time to take advantage of the investment in this metal that seems to defy inflation and provide peace-of-mind in an otherwise risky portfolio.
High Demand In Jewelry Industry
Remember the first thing you thought of when we brought up the subject of gold? If it was jewelry, you’re not alone. There are plenty of businesses selling jewelry. For this reason, there is an increasing demand of gold in the business of love. From engagement and wedding rings to holiday gifts and more, gold jewelry offers an excellent and highly expressive way to tell the ones we care for the most that we love them.
China and India have a combined population that makes up around a quarter of the world’s population, and they are currently the two largest bullion consumers. The middle classes of these two countries are expanding, and this gives us the expectation of a continued increase in demand. The desire for gold is so prominent, in fact, those Indian households, as of 2016, owned more collective gold than the cumulative gold owned by the top six central banks!
Protection Against Political Unrest
Few would argue there is a high degree of unrest in the political realm. It doesn’t take much time scrolling through your Facebook timeline to see just how divided we have become. While this can have a direct impact on our economy, its effect on the price of gold has historically been minimal.
It’s not just during times of economic instability that savvy investors have turned to the investment in this precious metal. When the going gets tough on the geopolitical realm, gold has actually been known to increase in value. Regardless of your political beliefs, the fact remains that the state of our political climate can change on a dime, making the investment in gold one that promotes stability in an unstable society.
Portfolio Privacy Maintenance
Another reason to invest in gold is for the porfolio management benefits. Just when it seems our private data has become more public than ever, physical gold provides a great way to maintain a degree of privacy and confidentiality when it comes to your investment portfolio. This is because it’s one of the very few investments that can be made anonymously. With just about any other investment currently available, it’s simply not possible to make an investment without someone knowing about the transaction.
Due to its nature, gold can be easily carried in your pocket, and it’s highly recognizable no matter where you are in the world. This makes it easy to liquidate. A few advantages you have should you ever need to turn your gold into cash include:
- Cash or goods are available immediately.
- No wait time for settlement
- Large, international customer base
Easy To Understand
Let’s face it. All the bells and whistles involved with investing can make even the most experienced stockholder a little confused. Perhaps one of the most attractive qualities of gold investment is the fact that it doesn’t require any specialized knowledge.
While legitimate diamonds can be hard to spot and a fake painting difficult to pinpoint, finding a real gold bullion is simple. Since you’re investing to minimize risk and protect your financial stores in case of a crises, this means rare coins aren’t needed. Best of all, once you get your hands on it, it’s simple to store and doesn’t typically cost safeguard.