Trying to decide where to invest our money and how to diversify our portfolios can be a big undertaking. After all, while we don’t want to fall into the trap of putting all of our savings into one thing, we do want to choose sound industries that feel safe. For that reason, choosing precious metals (particularly gold) might feel risky.
I completely understand that sentiment. It absolutely can feel overwhelming before you even start. However, investing in this market is accessible and a lot simpler than it may seem. If you’re not convinced yet – let me explain!
Why Gold?
Maybe you’re wondering why you should choose this metal out of all the different choices out there. After all, silver and platinum also have markets and can add some much-needed variety to your folder. However, gold is probably the most popular of them all.
There is a rich history to this metal. Statues, jewelry, and other trophies have used it for years. It was seen as a status symbol by many kings, queens, and even pharaohs for centuries. Today, it is still considered very valuable.
If you are curious, you could read this article for more details on this topic. Something to keep in mind about this element is that the prices for it tend to fluctuate often. This probably sounds scary for investors – I totally understand that.
However, what you should know is that does not operate under the usual economic patterns. Instead, the hoarders of gold have a high influence on the market costs. If they decide to sell, the prices overall will drop. If they are buying, however, prices will jump back up again.
Interestingly, the prices of gold dropped in 2021. While there has been a lot of speculation as to why, the primary theory is that it was largely due to the stimulus money that was injected into the economy. Think about it – the increased circulation of currency in general made a lot of people feel more secure in investing at all.
So, many people chose to put their stock in things like cryptocurrency rather than the traditional avenues like precious metals. Some experts wonder if eventually cryptocurrencies will usurp the place of metals in the market. However, this does not seem likely given the rich history behind gold compared to the somewhat scandalous creations of many virtual coin types.
Overall, I would say that it is still a safe choice for potential investors. While the price of it is somewhat linked to the levels of inflation in the economy, the future of this currency is probably going to be influenced most strongly by organizations like the Federal Reserves.
Is it Still a Safe Bet?
As I briefly touched upon above, I would say that overall, the answer to this question is yes. You can see some of the reasons for this here: https://www.investopedia.com/articles/basics/08/reasons-to-own-gold.asp. However, I will go over a few others as well!
The most important aspect of this field of investing is probably that gold has historically always retained a high value. Even when it dips sometimes, it bounces back. This makes it a fairly safe choice – even if you cannot always liquidate, there will be a time where you can for a profit.
Next, it is a good idea to remember the state of our world and the uncertainty of it all. When I say this, I am largely referring to politics. Naturally, geopolitics are influenced by economies, and vice versa. So, individual currencies fluctuate in value a lot more than gold. In fact, when people are feeling worried about current events, gold actually rises in price most of the time. It is more consistent than other investments in this way.
Interestingly, the time of year can influence the worth of gold as well. This is largely because of the role it plays in many different cultures around the world. Particularly we can look at India and China, as it is used in a lot of jewelry and in bars for saving purposes. The month of October has a high global demand for this material because it is Indian wedding season.
Another thing I will touch upon is that they value of the United States dollar in particular is not reliable. While it is an important form of money around the world, when its value drops, many people return to investing in gold instead. That is because they see it as a safer choice.
How to Invest in Gold?
There are a lot of ways that you can get into this market. For example, you could look at a list of the best gold affiliate programs for an idea of where to start. That is not the only method, but not a bad choice if you have reservations or are uncertain about any step along the way.
You could opt to buy physical gold. This is usually called “bullion.” A lot of us think of this as the bars that we see depicted in a lot of movies, games, and television shows, but that is not the only form that bullion can take. After all, it is defined as any physical manifestation of pure gold.
Smaller bars or coins are more popular for investors because they are much easier to liquidate than large ones. It is a more flexible form of the metal because you can opt to sell more specific amounts, rather than being limited to one chunk.
The other most common option is buying into an exchange-traded fund that specializes in gold. This may sound more complicated, but in a lot of ways it is actually easier. That is because they function like regular stocks. You can even get them through an IRA account.
That being said, it is difficult to find a company that exclusively deals in gold. Many of them are also invested in other commodities in the market. As with most things to put our money into, it is best to research what options are best for our individual financial needs.
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