With former popular investments, such as, ISAs and rental properties producing increasingly poor returns, and the risks of the stock market growing, many investors have started to question where their money is safe. Interest in gold investments is increasing, but new investors may ask themselves whether gold is a wise investment.
Gold has long been considered a good asset to invest in. As both a hedge against inflation and a way to diversify your portfolio, the benefits of gold investment should be considered by anyone looking for a simple, safe way to protect and grow their money.
Why invest in Gold?
Gold has been a highly valued precious metal for most of human history. From the Egyptians, to the first Roman gold coins, right through to the present day; people continue to be fascinated with the dense, yellow metal.
One of golds key strengths is its isolation from the trends of other markets. Historically, when the global economy has been in crisis, gold has remained strong (and even made significant gains). An example of this is when the price of gold increased rapidly following the financial crisis in 2008/09 and remained high even as economies began to recover. Gold tends to make gains during periods of rising inflation, in particular; as investors see that their money is losing value, they look to safer assets like gold that is able to hold its value.
Unlike money, which can be printed by banks as part of a quantitative easing program, gold is a limited resource. Increased demand from emerging markets, and gold’s use in the technology industry, mean that when coupled with the finite nature of the metal, the price of gold can remain strong.
The ultimate way to control your investment is by owning physical gold. There is no third-party risk, and you can decide where to store your gold and the duration before you sell. Gold can be stored in a secure storage unit.
When you do decide to sell, this can be done easily and promptly via online dealers. A lot of dealers buy gold back at competitive rates and list live buy-back prices on their websites. This transparency makes it easy for customers to make an informed decision when it comes to selling.
Is it Worth Investing in Gold?
Gold as an investment relies on an increase in value to make returns, rather than the annual yield you might see from stocks and shares or a property. For gold to reach its true potential it can take time, which is why gold is seen as a long-term investment. Gold has shown excellent performance since the 1970s, with a price per ounce that has steadily increased, making it a wise investment.
For a savvy investor, profits can be realised in relatively short periods of time. Awareness of gold’s performance, coupled with a reasonable knowledge of current affairs, can give investors the ability to spot prime opportunities of when to buy or sell their gold.
To summarise, gold is seen as a good, long-term investment, protecting your money for years to come. It possesses strong potential returns, at low risk, and is the perfect way to diversify your portfolio and spread your exposure to any losses.
Investing in Gold Coins
Investment gold can take various forms; jewellery, bullion, exchange traded fund (ETF) or even investing in mining companies. All these are ways to invest your money into gold, but in the UK one of the best ways to invest in gold is to buy UK coins.
As legal tender, there are various British gold coins that enjoy tax benefits. Gold Britannia coins and Gold Sovereigns are both VAT-free when you buy, and Capital Gains Tax (CGT) exempt when you sell, saving you money when you buy and maximising the returns on your investment.
International coins are also a popular way of buying gold, as they are recognised globally making them simple to sell. Countries around the world produce their own investment bullion coins, competing for a part of the growing market. Although no longer exempt from CGT, these international gold coins are still a good investment option.
Investing in Gold Bars
Gold bars are another popular alternative to gold coins. The relatively simpler designs, and larger unit size, means that bars will typically have a lower premium than coins. Like coins, they are also VAT-free but, unlike coins, gold bars are not exempt from CGT. Larger investors however, searching for the absolute best price per gram will often choose gold bars.
Should I Invest in Gold?
As with all investments, deciding where to invest your money should be a carefully considered decision. The rule of thumb is no more than 5-10% of your liquid wealth to be invested in gold. Diversifying your portfolio reduces overall risks against the volatility in any market, and by investing in gold you can protect yourself against the wider economic fluctuations and uncertainties that many other assets are weakened by.
Original article source: https://www.bullionbypost.co.uk/info/is-gold-a-good-investment/
Original image source: https://www.financialexpress.com/market/commodities/gold-prices-off-record-high-level-today-may-rally-to-rs-55000-by-year-end-should-you-buy-or-hold/2018360/
