12 Benefits if You Have Gold Investment

Benefits if You Have Gold Investment

Gold investment is a common thing in Indonesia as it is considered a guaranteed form of investment because its price often increases every year. 

Besides, there are many advantages of investing in gold that you can get. Hence, there is nothing to lose to set aside some of your income for investing in gold. But of course, don't forget to set aside 5 percent to buy health insurance. Just in case you suddenly get sick.

In this review, omdody.com wants to discuss the gold investment. Starting from the profit and loss, and the right time to invest.

What are the advantages of investing in gold?

This is the attraction of gold as a precious metal. There are several advantages of investing in gold that make many people attracted to placing their funds in this precious metal. Then, what are the advantages of investing money in gold?

The following is a list of the advantages of investing in gold.

  • The existence of gold as a precious metal is recognized and accepted by many people in the world.
  • Gold is a fairly liquid investment instrument.
  • The value of gold tends to be stable compared to other investment instruments.
  • Gold protects the value of money from inflation ( hedging ).
  • Gold investment plays a role in investment diversification.
  • Storing gold is very useful when conditions are uncertain.
  • Can be traded online.
  • Price movements can be monitored at any time.
  • The risk is minimal.
  • In the long run, gold can become an emergency fund.
  • Can buy less than 1 gram.

1. The existence of gold as a precious metal is recognized and accepted by many people in the world

Almost everyone around the world believes and agrees with the value that gold contains. Interestingly, in this world, there are several types of precious metals that are more valuable than gold. 

However, the history of gold which has been known since ancient times has made the value of this precious metal continue to this day. Gold was once the dominant medium of exchange.

2. Gold is a fairly liquid investment instrument

Because it is believed to have a value and everyone agreed with the concept, gold is easily sold for ready cash. You could say, this precious metal is classified as a liquid investment or has good liquidity.

Its universal nature is beneficial for those who invest in gold. Because wherever and whenever the time is, gold can be converted into cash.

3. The value of gold tends to be stable compared to other investment instruments

The reason why gold investment is profitable is that the value of gold tends to be stable. Gold has lower volatility than other investment instruments. 

The point of low volatility here is that the price does not change quickly in a short time. In other words, the price of gold does not suddenly go up quickly or go down in an instant.

4. Gold protects the value of money from inflation ( hedging )

Inflation on the one hand can be beneficial, but on the other hand, can be detrimental. That's why the inflation rate must be in the right range, neither a plus nor a minus.

Even so, it takes anticipatory steps in protecting the value of money. This is because inflation hurts the value of money we have.

Gold investment is one of the steps to protect the value of money from inflation ( hedging ). The problem is that when the value of a currency, such as a dollar goes down, the value of gold is maintained, even its value goes up.

5. Gold investment plays a role in investment diversification

For the risks borne not to be very large, it is necessary to diversify in investing. The purpose of diversification here is to diversify the investment portfolio. So, the investment that is owned is not only stocks but also other investment instruments.

So, gold is an option in diversifying investment. Because gold has a negative correlation with stocks. When stock prices fall, gold prices tend to rise. By having gold in your portfolio, stock losses can be minimized.

6. Storing gold is very useful when conditions are uncertain

Political and economic uncertainty is a frightening ghost for many people, including those who have wealth. When these conditions occur, investing in gold is the right decision and very useful.

Most investors will shift their money to gold rather than stocks when economic conditions are overshadowed by uncertainty. Instead of accepting big risks, they secure wealth by investing in gold.

7. Can be traded online

The sophistication of technology today makes it easier for us to carry out various kinds of transactions online, including buying and selling gold.

Buying and selling gold online offers a variety of advantages and conveniences. Starting from the easy and practical way, low capital, saving space, and also free of administration fees.

However, before buying and selling online, you need to make sure that the seller or service provider is trusted and has been registered.

8. Price movements can be monitored at any time

Can be done online, gold investment can be monitored anytime, anywhere. Price fluctuations can also be known in real-time. Therefore, if you want to sell it at the best price. Maybe once done. Vice versa, you can buy gold when the price of the sedan has decreased.

9. The risk is minimal

Choosing gold as an investment instrument, especially for those of you who are beginners, is the right choice because the risk is minimal.

Gold that can be stored for a long time will not change physically. It will not create a loss in quality which is associated with a loss due to its decreased value. 

The risk of investing in gold is minimal because the price tends to be stable and is certainly safer than stocks.
The price is stable due to the demand and supply of gold in a market that is also stable. Besides, it is not affected by inflation, instead, the price has skyrocketed and will provide maximum benefits.

10. In the long run, gold can be an emergency fund

Gold is a long-term investment instrument because the benefits cannot be obtained quickly. Indeed, fluctuations continue to occur in him, but in stable economic conditions, the price of gold tends to be stable. 

The fluctuation in the price of gold itself depends on the value of the national currency against foreign currencies. Besides, it is also caused by the financial condition of a country. Therefore, the difference between the purchase price and the selling price cannot appear immediately.

Even though the price increases only every few years, the price of gold tends to increase rather than decrease. Therefore, making gold a long-term investment instrument that could become an emergency fund in the future is the right choice.

11. There is more than one choice

To invest in gold, you have many options as gold in physical form which is preferred by conservative investors.

There are also gold futures whose risk is of course greater than the previous two types. However, the benefits provided are even more lucrative. High risk, high return.

12. Can buy less than 1 gram

With all the conveniences that exist today, one of them is an online platform to invest in gold. You don't need big capital to start investing.

Of course, the size is very small, less than 1 gram. It's okay to start small firstly because everything big starts small.

The drawbacks of investing in gold should be aware of

Behind the advantages of investing in gold, there are downsides to watch out for. Unfortunately, not many people know about the risks of owning gold.

The following are some of the drawbacks of investing in gold.

  • Money gold investment for the short term is less attractive.
  • Even though it tends to be stable, the price of gold can also decline.
  • Gold cannot create passive income.
  • Gold also has the potential to create a bubble.
  • There is a negative difference when buying and selling gold on the same day.

1. Money gold investment for the short term is less attractive

Even though it is safe, aka minimal risk, getting profit from investing in gold cannot be obtained quickly. Except, the world's political and economic conditions are less conducive.

Just compare it with stocks that can go up more than 5 percent in a day, but can also reverse direction quite sharply.

That is why it is reminded not to expect high profits from owning gold for the short term. The use of gold in the eyes of most investors is limited to protecting the value of money.
Don't be surprised if investors don't completely convert their funds into gold.

2. Even though it tends to be stable, the price of gold can also decline

Gold price movements are likely to be stable. However, that doesn't mean the price can't go down. Gold is not like a commodity whose price can change.

Several factors influence the price of gold. Starting from the policy on changes in the benchmark interest rate by the Fed, economic conditions in the United States, supply and demand for gold, inflation, dollar movements, to uncertain economic conditions.

3. Gold cannot create passive income

Gold investment is not the same as a stock investment. Storing money in the form of gold is also not the same as storing money in deposits or bonds.

Investing in stocks can pay dividends every year, whereas investing in gold doesn't pay dividends or anything like that. If putting funds in deposits or bonds can pay interest, owning gold does not produce that at all.

The only advantage you can get from gold is when the selling price is higher than the price when you bought it, selling gold at that time can benefit you. That is why gold cannot be expected as a source of passive income.

4. Gold also has the potential to create a bubble

Not only stock prices also have the potential to create bubbles. This potential can arise when the gold price is considered too high and investors are worried that they finally sell the gold they own.

The number of investors who sell gold makes other investors worried and finally makes a decision to sell the gold they have. In turn, gold, which is all high value, has lost its value as a result of the selling action by many investors.

5. There is a negative difference when buying and selling gold on the same day

Although the liquid is easy to buy and easy to sell, there is a difference in the buying and selling price of gold. Instead of a profitable difference, the difference earned is the difference in losses.

When is the right time to invest in gold?

As mentioned above, changes in the price of gold are influenced by some factors. When you want to invest in gold, it's good to pay attention to these factors.

The following are the factors that indicate when to buy gold.

  • When the central bank of the United States, the Fed, lowers interest rates, it's time to buy gold.
  • Economic conditions and falling share prices.
  • Political turmoil and inflation.
  • Don't invest when the gold price is high

1. When the central bank of the United States, the Fed, lowers interest rates, it's time to buy gold

The price of gold globally depends on the benchmark interest rate decided by the Fed. If the central bank of the United States decides to lower its benchmark interest rate, the dollar value will decrease. That means, investing in dollars is not attractive.

Investors then looked at gold as an alternative for saving the money they had. The price of gold was boosted by the buying action of investors who chose to avoid the dollar.

2. Economic conditions and falling share prices

The Fed's decision to lower the benchmark interest rate was based on the economic conditions in the United States. Bad economic conditions tend to encourage the Fed to lower its benchmark interest rate. This then reduces the value of the Dollar and raises the value of gold.

The impact of the bad economy was also reflected in the decline in stock prices, particularly blue chips. Seeing these conditions, investors are less interested in placing their money in stocks. As a result, gold was chosen which increased the price of gold.

3. Political turmoil and inflation

It cannot be denied that political turmoil has made the economy sink. As a result, inflation also rises and causes the value of the currency to decrease.

When there are symptoms of rising inflation, that's the time for you to invest in gold to secure the value of the money you have. That way, the value of the money that you hold will prevent the depreciation of the currency's value due to inflation.

4. Don't invest when the gold price is high

The price of gold shows an upward trend in recent times. Behind the price of gold, which has high reached, people are advised not to buy gold at this time. The reason is, even though gold is a haven (safe hedging asset), the increase that has occurred in recent times is thought to be influenced more by the psychology of market players.


1 Response to "12 Benefits if You Have Gold Investment"

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