- Gold as a finite resource
According to estimates from the US Geological Survey several years ago, the world’s gold supply is said to run out in approximately 20 years’ time. Though this statistic seems unnerving at first, it actually implies that the value of gold is only going to increase in future years, meaning your investment is going to work harder as time goes by.
There’s only so much gold to go around, and investors are willing to pay more and more as demand for the metal rises! Compare this to saving in Sterling, where the Bank of England are able to simply print more money when they like to stimulate the economy – reducing the value of the Pound each time!
- Gold is not at risk from any counterparty
When purchased gold completely bypasses the counterparty exposure associated with investors in stocks. So it doesn’t matter if a particular company goes bankrupt, a bank performs poorly, or even a country asks for a bailout, gold is independent of them all.
- Gold as a collectable item
Ever received a piece of gold as a family heirloom?
Aside from its obvious value, gold is rare and distinctly beautiful and is often bought to add to an owner’s collection for their own gratification. Coins, bars and even jewellery are often passed down through the generations within families that appreciate this precious metal, meaning that there is consequently less gold released into the wider market.
This is yet another factor that indirectly pushes up the price of gold to the advantage of your investment.
- Gold as an addition to your investment portfolio
Why bury your life savings in a fruitless ISA and hope for interest rates to rise when you could be generating more capital from a variety of different sources? Any trained financial adviser will suggest that you spread your resources amongst various sources of investment to offset any potential losses.
If you’re concerned that you’re going to lose money through other aspects of your portfolio, including your property, bonds, pension or ISA, you should, without a doubt, consider placing your funds into physical gold.
With the world’s economy at a standstill, gold provides a natural place to hold some of your money as it’s renowned as the world’s safe haven asset. This means it tends to rise in value during times of economic and political unrest.
So if you believe the global economy could get worse before it gets better, then gold is the perfect way to spread your eggs into different baskets.
Gold presents you with an extra level of financial security that’s difficult to match with any other kind of asset.
- Gold as an alternative to cash
The global financial crisis has encouraged many investors to think more shrewdly about their investment strategies. As currencies across the globe continue to depreciate and the financial landscape looks progressively uncertain, savers are looking at innovative ways to protect their wealth and investing in gold provides a way of reducing your exposure to unreliable market conditions.
With record low interest rates, savings kept in the bank or an ISA are actually losing their purchasing value once inflation is considered. In contrast, gold is renowned as an asset that has always provided wealth preservation.
Benefits of gold
Gold is a fantastic investment for everyone.
Being a tangible asset it holds none of the risks associated with paper assets such as bonds, shares and even savings accounts. If you like the security of bricks and mortar, gold will also appeal for the very same reasons. Investing in gold actually reduces your risk exposure and portfolio volatility.