5 Key Reasons People Invest in Gold
There’s no doubt that we are living in tough economic times. From problems with some of the largest banks in the country, the risk of US debt default, and interest rate hikes, the news hasn’t been encouraging from an economic and investment point of view. It’s not surprising investors are looking to diversify their portfolios in an attempt to protect their future purchasing power.
Investing in gold can be a smart decision because it provides protection against inflation and offers liquidity, unlike other instruments. Furthermore, precious metals does well in times of economic turmoil where stocks, bonds, and other traditional investment avenues tend to swing wildly.
Let’s look at a few key reasons people invest in gold.
It Holds Its Value
Gold is a precious metal that has a rich history of holding its value. Unlike other paper-based investment instruments, fiat currencies, and even digital investment tools such as cryptocurrencies, gold has maintained its value throughout turbulent times. Moreover, people visualize gold as a way to pass their generational wealth without losing their intrinsic value. People throughout the ages have always valued the unique characteristics of this precious material.
US Dollar Weakness
The US dollar is experiencing high volatility currently due to the debt default crisis. Although the currency is considered one of the most stable, and many countries use it as a reserve currency, when the value of the USD falls, it prompts people to opt for safer investments such as gold.
When comparing gold and the USD, the precious metal’s price nearly tripled from 1998 to 2008 and crossed the $1,900 mark between 2008 and 2012. Gold is currently touching its all-time high and is set to rise further during such periods of economic uncertainty.
Inflation Hedge
Perhaps one of the most important reasons people invest in gold is that it has historically been an excellent hedge against inflation. Gold prices tend to rise when the cost of living increases, which has been statistically proven throughout history.
When fiat currencies such as the USD lose their power to inflation, gold tends to be priced against those currencies and surges in value along with other things. Gold has always been considered a good store of value, and people flock to buying the commodity when fears of inflation rise. Inflation has continued, and the higher cost in living has caused investors to strengthen their positions in gold.
Geopolitical Uncertainty
Tangible precious metals, such as gold, are a worthwhile investment, perfect for a diversified portfolio. Apart from that, gold is considered by many as the number one combatant against inflation, and precious metals are known to thrive in geopolitical crises. In geopolitical uncertainty, people often prefer gold when tensions abroad rise. Gold has proven to outperform other investments in such turbulent times.
Portfolio Diversification
As you may have heard, you should not put all your eggs in one basket. It is essential to diversify your portfolio to offset possible losses. However, it is important to have a viable diversification strategy to maximize returns and minimize losses. The key to successful portfolio diversification is to find investments that offset each other.
People prefer to invest in gold because it has always had a negative correlation to conventional investment instruments such as equities, stocks, and bonds. For example, the late 1970s proved terrible for stocks and saw gold rise in price.
Similarly, in 2008, people considered investing in gold as stocks dropped substantially due to the economic crises. During this period, the S&P plummeted by more than 50% while Gold rose by almost 25%.
It is important to diversify in tangible precious metals, such as gold, to reduce your portfolio’s overall volatility and risk while protecting your purchasing power over time.
Investing in Gold
Gold should always be part of a diversified investment portfolio. While prices can be volatile in the short term, the tangible precious metal has always maintained its intrinsic value over the long term. If you’re an investor looking for sustained returns and want to preserve your hard-earned income for the long run, there’s no better place to park your money than gold.
Now, you can own gold in various ways, including IRAs, insured storage, and home delivery. Whichever you choose, do your due diligence and choose a way that is best suited to your unique needs and requirements.
Moreover, it is also important to work with a reliable platform or a trustworthy precious metals company where you can seamlessly buy, sell, or trade your investments with a phone call. You want to make sure you choose a company that offers transparency and value, and it is essential to find a reliable company for your precious metal needs.
Get Started with Orion Metals Exchange
If you’re looking for a top precious metal company, you’ve come to the right place! Orion Metal Exchange is your one-stop solution for all your gold investment needs. We have built a solid reputation as a reliable source where investors can receive market insight, value, and product knowledge that will help you make a sound financial decision.
Our business model is designed to provide you with the comfort of buying gold ira rollover, selling, and trading gold investments with ease. You can start your tangible precious metals investment journey with a simple phone call.
Our dedicated in-house IRA department is ready to secure your retirement with gold and silver account requests, ensuring a seamless experience as you prepare to diversify your portfolio with precious metals such as gold, silver, platinum and palladium.
Get in touch with our representatives today to learn more about our products and services we offer.
