Investing in Gold: The Pros & Cons

Over the last few years, you’ll have seen a surge of gold investment opportunities. There are even shops on the high street now offering to trade gold. They’ll pay you to take your old jewellery off your hands or trade some valuable coins. The reason for this is that gold is a solid investment. In the aftermath of 9/11 it was one of the only assets that increased in value. Everything else on the stock market crashed.
Investing in Gold

The stock market is always uncertain. This has been exacerbated by the recent global slump, so gold was considered a safe place to invest your money. However its value has leveled out somewhat in the following ten years (probably due to this huge rise in trading). It leaves many asking the question, “Should I buy gold?” Let’s take a look at the pros and cons and see where the value is.

Pros

Gold is considered one of investments ‘safe havens’. It retains a solid footing on the stock market, rarely fluctuating too much. This is because it is not tied to currency. In difficult economic times, the government often prints more money. They do this in an attempt to increase circulation and keep people and companies trading. However, it does devalue the currency. As there is more in circulation, its real worth decreases. This doesn’t happen with gold. It retains its worth.

People will always value gold. Gold is a symbol of wealth and luxury. Its value is placed higher than most precious metals. It is ingrained into our society and culture. Wedding rings will always be made of gold and it will always be used to adorn our prized possessions. Gold holds a cultural worth that goes back centuries and will hold into the future. Very few other investments can offer this.

There is a finite amount of gold. You cannot just print more. There are only so many gold reserves in the world and it takes time and effort to mine it. Where there is a finite resource, its value will always hold. Buying gold is a great idea when building a portfolio of successful investments.

Cons

Many investors decide not to invest in gold because it simply doesn’t do anything. It is mined from the ground, bought and then kept behind closed doors. It has no practical application which means it will never see a global soar in value. It isn’t like cobalt which now has a practical application in mobile phones, for example. Gold will always be a fashion item, or a decoration. It is already as culturally valuable as it is likely to get. It means you’ll never make a huge windfall by investing in gold. Gold won’t make you a millionaire.

It can also cost you money to store it. Some investment deals will come complete with storage options, but not all. Check to see how much it will cost to store and make sure your investment is worth the money.

In the end, it’s a personal choice. There aren’t many downsides to buying gold. It is a safe investment. Many use it as a form of insurance for their portfolio. It will never make a million, but it will always keep you steady.

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