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The investing patterns and choices of millennials are definitely not the same as those who came before them. Millennials are more achievement-oriented and ambitious. They are more focused on current financial standing and less concerned about what will happen twenty years from today. At the same time, millennials are highly risk-averse. This is because they’ve lived through the 2008–09 financial crises and act cautiously to avoid similar setbacks.

So if you’re a millennial, forget stocks and bonds. We’re here to suggest an alternative investment vehicle that suits your requirements—gold. Here’s why:

High demand

No matter which part of the world you belong to, gold was an integral part of your culture at some point. From India to the United States, it holds immense ornamental and cultural value.

History tells us that, centuries ago, Central Americans used to throw gold in water to offer it to their gods. Whether you’re looking for an engagement ring for your loved one or an expensive gold necklace for your parent’s wedding anniversary, gold is a timeless option.

This is why it’s a very liquid investment. If you want to sell it off, you’ll always find a buyer who has the willingness and purchasing power to pay you.

Portfolio diversification

We’ve discussed how most millennials are risk-averse, owing to unfortunate memories of global financial crises. The biggest mistake that investors made back then was confining their portfolio to real-estate. When the housing bubble burst, all their savings went down the drain.

Gold diversifies your portfolio. Let’s see why this is important. If your portfolio includes stocks, bonds, and government treasuries, all your securities will go down if interest rates fall.

On the contrary, if you add a bit of gold, it will offset the loss of all other securities and you’ll incur minimal losses. Even if interest rates see a sudden change in value, gold will not be affected, and your portfolio will retain value.

Supply constraints

Over the last few years, market forces have seen an unusual turn of events in the case of gold. Although the demand for gold has predominantly remained constant, its supply has decreased. According to Investopedia, gold production from mines has been on a decline, which is why the central bank has not been able to sell as much gold bullion as it did before 2000.

When the supply curve moves downwards, prices increase—it’s a basic rule of microeconomics. This means that gold has become more profitable since the year 2000.

Orion Metal Exchange is a precious metal investment dealer that helps you purchase, invest in, and store gold in IRAs. For further details about our services, drop us a message. 

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