Is it good to invest in gold in 2023

 

    Investing in gold in 2023?  5 things to know     right now

For investors in 2023, gold may seem like an appealing investment. Not only has its value increased, but the precious metal can be a safe haven during periods of economic uncertainty. Gold prices don’t typically move in line with prices of other financial assets, like stocks. That’s why gold is often considered a safe haven investment asset for your portfolio. The stability of gold can serve as a hedge against inflation and mitigate the negative effects of market downturns.

The Top 5 Reasons to Invest in Gold

*Gold Is Money  

Gold is not used as a currency today, but its role as money makes it superior to any currency.

In fact, gold has been money longer than any currency in history. Gold has been a store of value for at least 3,000 years, while one of the longest currencies in history, the British Pound Sterling, is about 1,200 years old.

One of the crucial promises of money is that it serves as a long-term store of value. Gold fulfills this promise better than any currency. Look how much purchasing power all major government currencies have lost compared to gold.

Since 1900, physical gold has been the best long-term store of value.

There were periods wherein the short-term currencies grew in value more than gold, but over the long-term, this chart demonstrates exactly why the rich have always held it in their investment portfolio.

*Gold Investments Cannot Go Bankrupt!

If you hold gold, no paper contract is needed to make it whole. No middleman or other party is necessary to fulfil a contractual obligation.

That’s because gold is the only financial asset that is not simultaneously some other entity’s liability.

This is important because gold will be the last man standing when bubbles pop or a crisis hits. That’s a powerful tool to have in your portfolio when things start to go wrong in your country or economy.

It also means gold won’t go to zero. It’s never happened in its 3,000+ year history.

Gold will always have value. You can always sell it if you need currency.

* Gold Investments Act as an Inflation Hedge

The hedge against inflation is the traditional motive behind the investment in gold. The yellow metal serves as an inflation hedge in the long run.

When inflation rises, the value of the currency goes down. Over the long-term, almost all major currencies have depreciated in value relative to gold.

But gold prices have doubled over the last five years and quadrupled in a decade.

In a country like India, where every saving instrument may not provide returns, gold fares well when the inflation rate exceeds the interest rate.

Likewise, the annualized return of gold over ten years has been way higher than that of inflation. What this means is that gold has given individuals a real rate of return.

* Gold is a Tangible Asset

Gold is one of the few assets that is tangible, and thus, it creates a perception of safety among investors.

Purchasing gold is much easier compared to purchasing other tangible assets such as real estate.

Also, because of this feature, while assets stored digitally are prone to hacking and other misuses, gold is free from such concerns.

However, it does come with its own risks. So, be mindful of them.

*Gold is Highly Liquid

Gold is also ideal because it is easy to sell and can be carried in your pocket anywhere you go.

Gold is highly liquid. Virtually any jewelry dealer in the world will recognize gold and buy it from you. You can sell it to your local coin shop, a pawn shop, a private party, or an online dealer. It can always be sold for cash or traded for goods.

The process is frequently quicker than selling a stock in your brokerage account.

It usually takes 3 business days for settlement before cash can be transferred to your bank account or a check mailed.

And other collectables, like artwork, could take longer to sell, have a smaller customer base and would likely entail a big commission. But with gold, you can get cash or goods in hand on the spot with no hoops to jump through.

This liquidity means you can take gold with you literally anywhere in the world. And if you’re uncomfortable crossing a border with it, you can buy gold you can transport.

Conclusion

Gold’s qualities make it one of the most coveted metals in the world and a popular gift in the form of jewelry.

The decline of paper investment leads to an increase in the price of gold and hence gold is the perfect investment to make if you wish to diversify your portfolio.

In the short term, gold prices can be volatile, but it has maintained their value over the long term. If you are planning on investing in gold, make sure it is for the long term.

Investing in gold is worth considering.

Happy Investing!