Is it a good time to buy gold?
With the health crisis pulling down the economy, prices of gold reached near-all-time highs. The growth projection for 2021 is also at 11.5%.
Are these numbers enough reason for buying gold? After all, the volatility from various world issues brought this increase. Read on as we determine whether it is a perfect time to buy gold now.
Is It a Good Time to Buy Gold: Factors to Consider
Is it a good time to buy gold today? Is gold a good investment? Specific factors affect the answer to this question.
With the United States facing a looming recession, investing in gold seems a sensible option. Many consider gold as a recession-friendly investment. Historically, whenever the stock market crashes, gold prices go up.
The dollar is another factor to consider. It is urgent since its value is on a downward path. The national debt also reached $28 trillion earlier this year.
These factors mean $100,000 of gold investments in 2000 now have a $535,000 purchasing power today. On the other hand, your $100,000 cash from 2000 can only buy goods worth $65,000.
Gold may not fare well when it comes to long-term price valuations. Over the past three decades, the Dow Jones outperformed gold returns. Gold investments also come with storage and insurance fees, reducing your potential returns.
If your primary goal is diversification, buying gold today is a wise move. It is better to stick with equities when you want to focus on long-term returns.
Benefits of Buying Gold
When answering the question “is now a good time to buy gold?”, understand the benefits of investing in this precious metal. When buying gold, you reduce the risk of inflation. Over the past several years, gold consistently outperformed inflation rates.
It is also never a chore to buy and sell gold. You have several sources for buying physical gold, like banks and jewelry stores.
Gold does not require as much maintenance compared to other investments. A real estate investment needs regular maintenance to make it more attractive to prospective buyers. On the other hand, you need only keep gold inside a safe or locker before selling it.
Gold will not deteriorate with time or lose its value due to age. You can also pass them on to your children and descendants.
Ways to Invest in Gold
Aside from buying physical gold, you can invest in gold stocks. It involves buying stocks in gold-mining companies.
Another investment method is gold futures—buying and selling gold at a later date. It offers more liquidity compared to its physical counterpart. Management fees are also never an issue with gold futures.
Make Wiser Investment Choices Now
Now you know the answer to the question, “is it a good time to buy gold?” you can spread your investments and reduce financial risks.
However, investing in gold is only one of the many activities you can use for earning money. Consider other investments like cryptocurrencies.
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