Is buying gold a smart financial move? How do you know when it is a good time to buy gold? What are gold bugs?
These are all excellent questions to ask before you begin to invest in gold.
Let's look at the answers to these questions.
A gold bug is someone who is obsessed with the stock market and the idea of investing in gold. They are usually very optimistic about the future of the stock market, and believe that gold will continue to be a valuable asset. This results in them investing in gold stocks, gold mining companies, gold individual retirement accounts and even gold coins.
Because of its worth and steady history, gold is revered as a safe investment around the globe.
There are a variety of reasons for why people want to buy gold. Among other developments, trade in gold has transitioned from actual gold to virtual trading. However, gold in all its forms is equally desirable as an investment.
Even if gold isn't utilized as money today, its function as a valuable element makes it superior to all other currencies. In actuality, gold has been used as money longer than any other kind of printed currency. For example, while gold has been used as a store of value for at least 3,000 years, the British pound sterling, (one of the oldest currencies ever), is just approximately 1,200 years old.
Money's ability to act as a long-term store of value is one of its most important guarantees. This guarantee is better kept by gold than by any other asset.
All of these reasons and more allow gold to be an ideal asset for investors. The term used for these avid investors is “gold bugs.”
Why, then, do these gold bugs do what they do, and what value does gold still hold that has kept it in use for so many years?
Let’s look at all of that and more in the next section.
Aside from the returns on gold, there are a few unique reasons that attract investors toward gold which you may not have heard previously.
No formal contract is necessary to complete your holdings if you purchase gold, including third party or intermediary commitments. This is due to the fact that gold is the only financial asset that is not also a debt of another business.
This is significant because, when a crisis strikes, gold will be one of the few, if not the only asset left standing.
When things start to turn downhill in your nation or economy, gold is a handy investment to have on hand since history has shown that gold won't ever decline to zero. In fact, in its almost 3,000 year history, that has never occurred. Gold will always be valuable.
If you need fiat money, you can always sell gold to the highest bidder.
Investing in gold also serves as an inflation hedge. In the long run, the metal retains its value, and although some slight fluctuation is possible, it generally stays the same.
Currency loses value as inflation increases. In fact, nearly all of the major currencies have lost value in relation to gold throughout time. This is one reason why people invest in gold.
Another good reason that makes gold a worthy investment is the fact that gold is a tangible asset. Because gold is one of the few physical investments, it gives investors a sense of security. Gold is comparatively simple to invest in over other tangible assets such as real estate.
Additionally, gold is immune to worries such as hacking and other misuses, unlike assets that are held digitally. Gold does, however, still carry certain things to keep in mind.
We highly recommended that you do your own research and know where you are putting your money before investing in gold. By studying how others in the field made their gold investments, you can avoid the pitfalls of those that have gone before you.
Make sure your gold is genuine and of good quality.
Have in mind where you are going to store your gold before you purchase it. Some options are the bank, a safe or vault at your house, or a depository near you.
Know the buy-back policy and reputation of the company you buy from in case you change your mind.
Look into getting extra insurance coverage on your gold investment if need be.
Finally, investing in gold can help reduce financial risk and increase your net worth. Even in the event of an economic catastrophe or political unrest, precious metals are known for their stability and value retention. Their performance throughout history has clearly established this fact.
Since gold is also a global currency, it is handy to have on hand no matter where you go.
Additionally, gold is beautiful and strong, making it of more worth than other forms of money such as paper money. Neither the government, nor a central bank backs gold because of its inherent worth, putting you in the driver's seat of the investment.
These and other factors have made gold an excellent investment throughout history.
Check out some of our other articles and reviews to find out which is the right gold investment company for you.