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Why buy gold?
Why Buy Gold?
When you purchase precious metals, you are buying as asset valued since ancient times. Recognised viscerally by humans, Gold always has been and always will be a viable investment and commodity. But why? What makes Gold a good investment now? Why is buying physical Gold a good idea today? Let’s examine what makes buying physical Gold an excellent investment and collecting opportunity.
Gold vs. ISAs
Investing through an Individual Savings Accounts is a tax efficient way of growing and protecting your wealth. ISA,s are an easy tax-free option for your money, but how do they compare to physical gold?
£100k invested in Gold 10 years go would be worth 280k today. That’s an increase of 180%, an average of 18% year on year growth.
£100k invested in ISA’s 10 years ago would be worth 100k today. Any interest gained over this 10 year period would have been affected by the rate of inflation. The actual value of the ISA’s would have decreased in value giving you less purchasing power. It is important to take into consideration the rate of inflation to stand any chance of making profit from your savings.
One of gold’s key advantages is that it can be purchased to sit entirely outside of the banking system.
Low interest rates and rising inflation have punished savings accounts like ISA’s, while political uncertainty and economic volatility have seen gold’s demand increase, along with its subsequent value.
Gold vs. Property
Property and gold are often both considered “safe” investments, without the fluctuations of high-risk alternatives such as the stock market. So which one is best for safeguarding wealth in an uncertain world
GOLD: would be worth £286k in 2019, a 186% increase.
PROPERTY: would be worth £117k in 2019, which represents a decrease in absolute value.
Property has had a high profile among investors in recent years. However, gold has outshone it in the last decade, and the housing market is showing signs of serious deterioration. Gold is becoming the investment to consider when it comes to safeguarding wealth against financial uncertainty.
Gold vs. Cryptocurrency
No-one can magic more gold into existence by punching out a line of computer code.
Cryptocurrencies make a show of being in limited supply, but their supply can be increased at any time
Governments buy and sell gold – but they don’t control the supply of gold. Gold has always been – and always will be – beyond the control of any government.
All cryptocurrencies have to operate under the rules of the blockchain, which causes problems like transaction delays. In such a volatile market as today, such delays can be costly.
If you want to transfer cryptocurrencies you face hefty fees.
No-one knows what the real value of a cryptocurrency is. The price of a cryptocurrency can be moved by very small trades. Hence their wild price swings.
Gold is globally traded by millions of people, its value is universally transparent
Cryptocurrencies are notoriously open to cyber-crime. Their opacity is their weakness. Everyone knows what’s happening in the gold world.
The lack of regulations on cryptocurrencies makes trust in them a fool’s errand; fortunes can be made – and lost – in the twinkle of an eye.
Gold vs. Stock Market
While many investors prize gold above all other investments, others view stocks as the way to achieve long-term growth and wealth.
What is right for you depends your investment philosophy
Protection in an Economic Crash
Many investors look at gold as a way to provide protection in the event of an economic crash. The thought is that if U.S. or another country’s paper currency becomes worthless, gold will be used as an alternate currency. In a situation of total economic collapse, many companies in which you would own stock would probably go out of business due to the lack of paying customers. This type of scenario could render stocks worthless.
Gold is a tangible investment asset. It is an actual substance — one that you can see and touch. Stocks are certificates that state you own a portion of the company, and while they represent a definite percentage of the company that issues the stock, it is more difficult for some investors to see actual value in the stock. A stock can become completely worthless if a company goes out of business; gold is likely to retain some value; it has uses other than as an investment vehicle.