Investing in anything these days may seem like risky business, but one of the safest bets is gold.
Unlike money (notes and coins) and other currencies, gold has historically held its value – some currencies have been devalued over the years, and the value of each currency fluctuates almost daily, but gold itself has a proven history of staying strong throughout all of this.
Gold and Inflation
Gold is an excellent choice when it comes to hedging against inflation, simply because the value/price of gold rises with the cost of living (in most cases). Even during the past half century, when stocks in companies offering trending and innovative technology or financial institutions such as banks, and other businesses have crashed, the value of gold has actually risen rather then fallen, this alone makes it an excellent investment.
Gold and Deflation
During periods of deflation, businesses suffer, the overall debt in the economy rises, and we can end up in an economic recession, however, once again, this is where gold proves its strengths, during past economic recessions, the purchasing power of gold has increased greatly whilst other prices dropped significantly.
Supply and Demand
Gold is a natural resource, and as such, the amount of gold in the world is finite, this means that eventually the new supply will run out and the only gold available to buy will be that which is already in circulation – much like a classic car, when no more is being produced, the prices have been known to skyrocket – this is the same for gold, buy now and reap the rewards down the line.
Not only is the new supply decreasing, the demand for gold is increasing, this is driving prices up – the reason for the increase in demand is clear to see, with such a strong investment option, everyone wants a piece of the action.
You may feel that you have missed the boat and prices are now too high, but if prices are only going to rise, then getting in now rather than later seems to make sense. It’s always going have value right?
Very recently there was an amazing documentary on Netflix that the whole team here watched on the android tv box we have in the office about how when so much has changed over the course of thousands of years when it comes to products holding monetary value, the one thing that has always been a an organic constant, is gold. It’s actually quite incredible when you think about it.
The long and short of it
As a short term investment, gold isn’t ideal – prices can be volatile and see large swings in the short term, but long term it has an excellent outlook and diversifies any investment portfolio – it will never make you a quick buck if you’re looking to invest a small amount of money for a short period of time, but if you’re looking to the future, and investing a larger amount of money, then gold certainly is worth considering – you’d be crazy not to!