Why You Should Buy Gold as an Investment
Gold is the most sought-after of the precious metals as an investment vehicle. For centuries, gold has been a repository of value used to protect wealth. Its value has never diminished, and it has always been accepted globally. If you are considering buying gold to hold as an investment, here are some of the reasons why you should go ahead and invest in it.
Apart from its beauty and immense usefulness, the value of gold is assured because of the limited global supply of it. This scarcity is the reason it does not crash like stock markets or get devalued like paper money. While the demand for gold has risen, its supply hasn’t changed much. As more people hope to keep the gold, its price and value will rise even higher. For instance, identifiable demand in gold as an investment option rose 64% in 2008 only.
This scarcity is also the reason the value of gold is independent of other markets and commodities. Socioeconomic upheavals from wars to recession and inflation don’t devalue gold. Rather, at these times, the value of gold rises because in chaos, investors and countries seek to anchor and preserve their wealth in gold. In addition, gold can be traded for anything even when no other trading instrument is accepted.
When you buy and invest in gold, you are not taxed. In fact, in some countries, gold is exempted from even capital gains taxes when you sell your gold for cash. Silver, the next precious metal, does not enjoy this universal tax haven. Therefore, not only can you keep and even improve on the original value of your investment in gold, it also never reduces. Inflation can’t touch it and neither can taxes.
Furthermore, investment in gold usually attracts low brokerage fees. Because you are buying gold to keep and not to actively trade like currencies and other commodities, you don’t have to take out of its value to constantly trade it.
Comparative analyses of gold investments and stocks have shown that the value of gold is usually higher than most stocks. Therefore, while investing in gold provides none of the volatility of the stock market and no swings in prices, it still outperforms the stock market, not in volume, but in absolute value.
There are a number of options available for investing in gold. Quite the commonest is in buying gold bullion, which can be either coins or bars. Gold coins are easily bought, easily sold and easily transported, and they are traded more actively. However, gold bars present even more value as a symbol of wealth and purchasing power. They have high purity, usually 99.99%, and come stamped with the seals of the refiner and the mint. The weight and purity are guaranteed. They also are easily transported and stored.
So, investing in gold is not so exotic that it is beyond you. Rather, gold bullion bars and coins are real, tangible assets. Remember, when you buy gold, you are storing up your wealth in the only irreducible vehicle there is.