Inflation can take a heavy toll on the economy; when prices of goods and commodities rise sharply, it affects the purchasing power. The erosion of income impacts interest rates and the value of the local currency. When that happens, the value of your hard-earned savings can seem meager. Nevertheless, that doesn’t mean you should hunker down and give up.
When inflation creeps in, you can always save money in tangible assets like gold. Indeed, for many people, gold is a safe haven, especially against inflation, a declining dollar, or an unstable stock market. When your local currency devalues, the return of gold as a precious commodity to save your money is a wise move.
Because gold has an average correlation with other assets, such as stocks or bonds, the price of gold might be less affected by movements in other asset classes and financial uncertainty. Storing your assets as gold can be a financial safe haven, especially during geopolitical and economic catastrophes.
If you ever doubted the value of investing in gold, here are five reasons gold should be part of your investment portfolio.
It is Tangible
Unlike other liquid assets, gold is tangible; buying gold is much easier than purchasing real estate. Digital currencies like Bitcoin are prone to hacking and issues that arise from misuse; gold isn’t. Indeed, history shows that gold has shone amid stagnant economies, even in the midst of the renowned financial crisis of 2008.
It Diversifies your Portfolio
You might have heard the expression don’t put all your eggs in one basket. This motto is especially valid when the stock market tumbles. If you have all your assets and capital in the stock market, you risk going bankrupt if it falls. Investing in gold can protect some of your hard-earned cash and offset the risks associated with the stock market.
It is Easy to Buy and Sell
Many assets in the market today involve huge sums of money, buying and selling gold is relatively easy. If you encounter an emergency or a financial crisis, you can sell the gold and the get the needed cash. In the worst-case scenario, if you don’t want to sell it, you can keep it and ask your bank for a gold loan. Many banks provide gold loans to people who require immediate cash.
Tax Benefits
Gold investments are exempt from GST/HST. Nevertheless, they must be refined to a minimum purity of 99.50 per cent. Investing in gold allows you to get long-term capital gain and tax benefits for many years uninterrupted.
Price Stability
Compared to other assets whose prices can go up or down, gold is much more stable. In many cases, the prices of gold assets don’t go down even when the market is in crisis. That’s why many people turn to gold when they have financial difficulties, or the market is down.
How Can you Invest in Gold?
In a world where prices continue to rise sharply, precious metals like gold can act as a bulwark against the ever-rising tide of inflation. Resilient precious metals like gold give peace of mind to their investors, making them feel safe and secure, knowing that their hard-earned cash is in good hands.
If you want to invest in gold, buy physical bars or gold bullion, which is the yellow metal in coin or bar form. Gold jewellery is also a wise investment, these precious pieces can be passed down to the family thereby protecting its funds.
You can also purchase gold mining stocks; nevertheless, if you opt for physical gold, you should factor in the quantity and quality. Buying a higher amount of gold may eventually decrease the price per ounce; that’s why it’s imperative to be balanced.
You can also choose to open a gold savings account; this means that an increase in your gold savings can gradually influence your savings behaviour. If you increase your deposit amount in your gold savings, then the value of your assets will be higher.
When financial hardships hit, investing in gold is a smart way to keep your capital. After all, gold remains the least affected when the market crashes or pandemics hit. People who invest in gold are less likely to ruin their financial prospects; they are definitely making one of the best investments!
David Messiha | Staff Writer
