When it comes to investing, gold has an air of mystery like no other property. And it gets only more interesting for those planning to invest this year. So, is investing in gold a good idea right now? Luckily, this is a question we can answer with ease. It comes down to that how a respective investor views gold. Gold can be viewed as a currency and as a value.
Viewed as a currency, value of gold is relevant to current trends. There are other assets to buy which are worth more. On the other hand, viewed as a commodity, gold is worth much, much more. Read on to find out why investing in gold in 2018 is an awesome idea.
Great for diversifying your portfolio
Gold is amazing as an alternative investment. Depending on your existing portfolio, you should have anywhere from 3% to 10% of gold in your portfolio. Also, there are numerous ways to invest in gold. Most popular methods are:
- Physical gold bullion
- Gold exchange-traded funds
- Gold future contracts
- Gold mining stocks
- Gold streaming companies
However, before making any investments remember to check the current gold price. Since the 70s, gold has been on the steady rise, and is predicted to reach $1900 in a few years. This means that gold is still affordable and you can still get it at a great price.
Also, gold outperforms other alternative investments when it comes to both costs and returns. In the long run, it takes less money to maintain gold than to maintain other investments. Also, gold won't lose quality over time, resulting in a lower price when being sold. When you buy it, it becomes a part of your portfolio, and keeping it in the mentioned percentage is all you have to do.
That's quite important since the economic crisis of 2008 left us with a constant threat of a financial breakdown. That by itself is a good reason to keep gold in your portfolio. As a commodity, it's more secure than stocks.
More secure than stocks
Gold and precious metals performed as they should have in the midst of the financial crisis of 2008. Up to present date, gold futures gained 8%, and it's stipulated that it will continue to perform in this manner even in the event of a future financial crisis.
Then, there is a problem of vulnerability of stocks at cycle turns. Current political and economic turmoil raises the possibility of dollar weakening. This could lead to a devastating collapse of the market and the economy, leaving stocks in the mud.
However, there are other possible scenarios, like the "tech bubble". With technological innovation comes a paradigm shift. What was considered an amazing portfolio asset in the near past loses its worth. But, gold remains unaffected. On the contrary, gold can expect to go up in price during such periods.
On that point, gold is viewed as a commodity more often than it is viewed as a currency. For a long time, we based the value of money on the value of gold. Unlike the US Dollar, gold has been around since ancient Egypt. Gold is a legacy wealth.
Legacy wealth
In reality, assets with the highest value are precious metals and resources. It's logical that a high-price stock is going to be worth less during an impending crisis of resources shortage. An example of this would be having an expensive car, but no fuel to actually drive it. A car sitting in a garage is an expensive liability.
This can't happen with gold, since it already survived for thousands of years. It's possible to accumulate gold through generations, turning into real wealth. Even a small amount of gold could make a huge difference in a portfolio.
The only thing left is to actually purchase it. Just make sure you are certain about whether or not you are ready to buy. Make sure to check the price of gold, and in what periods the price of gold goes up and down.
Certainly, there are better periods to buy gold. Through the first few months of a year, the price of gold falls down. These months are January, February, and March. After that, the price grows during the period beginning in late July, continued with low growth in August and moderate growth in September.
This is a trend that has been around for at least a few decades. While the current price of gold may seem high, it's still a legacy investment. When currencies and stocks drop, gold will be even more valuable. So, there's no question whether to invest in it in the second half of 2018. Investing in it means investing in a lifetime. There's nothing like security.
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