Is Gold a Safe Investment?
Traded for thousands of years, long before the existence of fiat currency, stocks or bonds, gold bullion is a popular asset, particularly for those looking for a long-term store of wealth, and can present many opportunities for investors. A key question we are often asked is if buying gold is a safe investment.
What are the benefits of investing in gold?
Preservation of wealth
Gold is widely trusted by investors for its wealth preservation properties. For example, owning £100 pounds worth of gold from 30 years ago would now be worth much more than the original investment. £100 in cash has not increased in value and is worth much less due to inflation.
Unlike fiat currency, gold is not directly affected by interest changes and more cannot simply be printed when there is high demand. This precious metal is a scarce asset that can maintain its value over time, often acting as a safe haven for investors during periods of economic downturn.
Having a well-balanced portfolio is often considered a good idea in order to reduce risk. The addition of a physical asset which does not directly correlate to the stock markets, such as gold, can lessen the impact of market volatility for investors.
The price of gold often rises alongside rising inflation and a depreciating currency. Many investors turn to gold during these times as a hedging asset to protect against possible financial losses.
Entering the gold market
Investing in gold has never been as easy as it is today, and the precious metal has been one of the best performing assets in the world over the last few years.
A relatively easy market to enter compared to other investment options, there are multiple products available to choose from. Investors can choose between an array of physical gold coins and bars that can be easily stored, transported, and sold when required, and if you do your research, many of these can even have significant tax benefits.
Is gold a safe investment?
A scarce asset that has proven to maintain its value in the long-term, often acting as a safe haven during times of economic and political turmoil, gold is considered to be a safe investment by many investors.
Of course, gold, like any investment, is not completely without any risks at all. The price of this asset can go down as well as up, but historically it has proven to perform well, trending up over the long-term. It is always worth remembering that gold’s true purpose is for long-term security.
A useful asset to own as part of a well-balanced portfolio, this precious metal could be a sensible way to invest for those wanting to protect themselves against financial uncertainties and take ultimate control of their own wealth.
This blog represents one person’s opinion only. Customers should conduct their own research and take advice before making an investment. We do not offer investment advice.