Debunking the 3 Most Common Myths on Gold Investments
When it comes to making investments, you want to be sure of what you’re investing in. Gold, in particular, has gained considerable popularity in the last decade or so and is considered to be a solid investment option by many.
Unfortunately, there are several misconceptions regarding gold that prevents people from investing in this precious metal.
Here’s a look at some of these myths in more detail.
Only Wealthy People Invest in Gold
One of the biggest myths surrounding gold investments is that they’re only for wealthy and financially well-off individuals. This isn’t true. You can easily invest in gold bullion or coins even if you don’t own great wealth.
Unlike how it is in the case of certain securities markets, precious metal investments such as that of gold cater to all types of investors.
This means that your portfolio diversification, size, or experience isn’t crucial for investing in gold. Investors can also purchase gold in small increments as per their convenience.
Investing in Gold is Risky
Another myth that prevents people from investing in gold is that it’s a risky move. Many investors perceive risk as the loss of capital.
Others believe that the poor performance of an investment counts as a potential risk. However, assumptions such as these are more suited to investments based on equity markets or paper currency.
Not only has gold proven itself to be a consistent investment in the past several years, but it has also served as a haven against inflation and political instability.
When used as a long-term investment, it provides substantial results and is especially beneficial during times of crisis. In other words, gold serves as a hedge against inflation and protects you from uncertain circumstances.
It’s Better to Invest in Gold Mining Stocks
Gold mining stocks are often considered to be safer investments than physical gold. However, both of these investments are parallel to each other and in many cases, physical gold gives you more leverage.
Sure, gold stocks may increase more than gold prices do at times, but they also tend to fall more drastically than gold prices. Owning gold mining stocks also adds risks related to operational issues, political pressures, and asset management.
On the other hand, owning physical gold doesn’t include such risks. It’s a fairly easy-to-keep investment that continues to survive market fluctuations and requires little maintenance.