If there was ever an indicator for wealth and prosperity in this world, it would be Gold, the precious metal for which wars were fought, spawning a new generation of kings and queens. This natural resource has always captured our imagination, with those lucky enough to own it cherishing it and others looking for means to own it. Gold has retained its importance through the centuries, an indicator that only greatness survives the test of time.
We spend a majority of our lives working, in a bid to earn enough money to lead a decent life and investments are generally our way of saying that we are ready for an emergency, if it ever arises. If history has taught us anything, it is that there are very few products which retain their value, and gold is perhaps the only investment which has never faded away.
Golden Investment Opportunity
So why is gold an excellent investment? Does it have some magical properties which help it stay afloat during the most testing times? Here are some points which make gold an excellent investment tool.
- Protection against inflation – Inflation is a bitter truth of life and there is no escape from it, regardless of how hard or smart we work. Gold is perhaps the only element which retains its value and protects against inflation, with its value rising with the cost of living, often reaching its highest value during periods of high inflation.
- Diversification – It is essential to have a diverse investment portfolio as it helps balance out risks. Gold investments can act as a safety net against market volatility, as the value of gold is inversely proportional to traditional financial investments like stocks.
- Demand and Supply – Gold, being a natural resource is exhaustible, which means that there is a limited supply of this precious metal. Limited supply ensures that there will always be a demand for it, raising its value in the market, thereby making it an excellent investment choice. This demand is especially high in a country like India, in which gold is considered auspicious and where no celebrations are complete without it.
- Liquidity – Gold is an extremely liquid asset, offering investors the chance to trade it during emergencies or when they need cash. A high demand for gold ensures that it is easy to sell, commanding a good value even during the most testing times.
- Balances Currency Devaluation – Financial uncertainties can result in even the strongest of currencies losing their value. Now these currencies can be printed at will, but gold, being a tangible asset cannot be reproduced with a machine, protecting investors against currency devaluation.
- Crisis Commodity – Gold is referred to as the “crisis commodity”, thanks to its ability to retain its value even during the most testing times. Gold can survive both financial and geopolitical uncertainties, which is perhaps why most countries believe in having huge gold reserves which can be used to combat any situation.
- Simple to own – Buying gold is no longer a tedious process, as individuals can invest in it through multiple mediums. Investors can choose from physical gold in the form of bars, coins and jewellery or opt to invest in it through Exchange Traded Funds, E-Gold, Gold Savings Accounts, Gold Funds, etc. This offers flexibility and ease of owning gold, without having to worry about its safety. It is natural for individuals to ponder over investment options, worrying about several factors. If we have learnt anything from the past, it’s that gold is an investment one could opt for with their eyes closed, without giving it a second thought.
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