Obviously, you may be wondering why gold is so important or precious and what all the noise is really about. Well, the brain behind my article is that I don’t want you to ignore your future and financial/investment/retirement planning. You shouldn’t keep going in the dark about gold and precious metals, so I present to you foolproof reasons why gold should be part of your investment combo.
1. Asset diversification. When thinking about investment vehicles, an old adage “don’t put all your eggs in one basket” often comes to mind. Although some reviewers say to put all your eggs in one basket and take care of it, good luck to them. Reasonable and knowledgeable investors should ensure that at least 5% of their investment portfolio is gold and precious metals.
2. Continuous existence of gold. The fact is that gold left the human age behind and as long as the world remains, gold will be in perpetuity. Gold is superior to other property, commodities, or investments (buildings, vehicles, stocks, bonds, etc.) because the value of these properties can erode over time and prevailing economic events. Take, for example, the global stock market saga of 2008; You must also incur maintenance costs to keep them in good condition.
Gold on the other hand, the value does not erode or oxidize regardless of the number of years we are considering.
3. Shortage of gold. The gold supply is finite. Statistics revealed that the annual world production of gold is about 2,500 tons and the value of gold worldwide is estimated at 9 trillion US dollars. It is better that you buy gold now rather than regret it in later years.
4. Status symbol. Bluntly, gold is very attractive to the eyes and has a powerful impact on nature/human race. In fact, China and India are well known for the high value they place on gold as their store of wealth, so your wealth is expressed by the quantity and quality of gold you owned.
It is ingrained in human nature to want to belong to the highest political/social/investor class, so the value of the gold you owned in some society will dictate whether you belong to this ostentatious class of elites.
5. Counterparty risks. Gold is absolutely excluded from counterparty risk. Such a term means that you are placing your faith in the other party’s ability to perform a deal/contract by the due date. The examples of buying shares, entrepreneurs and employees will explain it better.
You buy stocks from the capital market in anticipation of dividends, price appreciation, and cash in the year ahead. The stock market may crash before your target date or in the case of an employee working for an employer, the employer is expected to pay tip and pension at retirement, but the employer may go under before The retirement. All of these scenarios cannot happen to gold because it is tangible, it is in your possession and you can easily convert it into cash to upgrade your lots.
6. Substitute insurance policy. The purpose of the insurance policy is to put you in the exact financial position that you were in before the loss. Gold can also play the same role if you have the same. In times of national crises (wars) like the one experienced in Africa – Liberia and Ruwanda, 1 kg of gold can restore a person to a life of convenience again.
7. Bull market (gold). When you read any guide or advisory about commodities or securities, the disclaimer is usually the beginning of it, and the summary is that “past performance is no guarantee of future results.” Therefore, gold is exempt from this standard and since the beginning of the new millennium; gold has been on the upswing with double digit gains.
8. Anchor against deflation. Of course, an open secret that economic recession is now a global phenomenon, the ever-increasing debts of nations (US and UK, for example) could potentially result in deflation with catastrophic economic impacts. The consequence is that asset values will erode, but gold has resilience and works best to hold its value regardless of economic challenges.
9. Geopolitical risks. Wars, terrorism (USA – unforgettable 9/11), natural disasters and other allied dangers characterize today’s global society. At the time of war, for example, the security and survival of the individual is the main concern, there will surely be paralysis and economic recessions. The main assets; real estate, financial instruments, other property, and cash currency will be nearly worthless in value. During that time, gold provides peace of mind and the value remains constant.
10. Reserve of value. Historically, gold is thousands of years old with backing records as the best store of value. Regardless of economic and global situations (technological changes, trends, development, etc.), gold possessed the characteristic of acceptability and constancy of value. Therefore, for investment security, retirement, and to pass your assets on to the next generation, gold is your best bet.
11. Gold backs money. History tells us that the first gold coins were minted and put into circulation around the year 550 BC; gold has been the longest and most durable form of money. Intrinsically, until the sun comes up tomorrow, gold is still a way to back money.
In view of these green lights, a stitch in time saves nine. Click the link below to start your gold or 401K investment.
