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As You Become Financially Stable, Is Gold a Viable Investment to Add to Your Portfolio?

As You Become Financially Stable, Is Gold a Viable Investment to Add to Your Portfolio?

Being financially stable means that you have an adequate amount of resources to support yourself even during difficult times. Investors try their best to become financially stable by diversifying their portfolio, which means holding different investments in the form of cash, commodities, and stocks. One commodity that has been popular for centuries is gold. While it may seem outdated to invest in gold, there are still benefits that will help you stay financially stable.

Gold is a finite currency, which makes it a valuable legal tender that is accepted in most countries. Owning gold could help cover your assets when currencies are failing, especially in times of inflation. When more money gets into the system, the more the value of a currency decreases. Venezuela’s current state of inflation is an extreme example but shows how quickly currency can devalue.

There’s no denying that gold still plays a significant role in today’s economy. When the economy is doing bad, gold prices go up and vice versa. Check the prices of the precious yellow metal when The Fed’s aggressive bond-buying program was still in operation in 2011. Based on FXCM’s gold price chart, the precious yellow metal’s prices at that time soared up to $1,900 an ounce. Gold is also a valuable commodity because unlike other metals like copper there is no expiration date. While its value may increase or drop depending on economic and global events, it still remains a valuable asset.

Gold bars

The best way to own gold is to have direct investments, meaning owning physical gold bars and not mining stocks or ETFs. Gold bars yield the highest profits because of their purity, which is graded by the London Bullion Market Association (LBMA). The problem with investing in gold bars is that they don’t come cheap. A bar with gold’s current prices cost approximately $528,000. In addition, storing them takes a lot of money. For this reason, most investors choose gold coins which are a lot cheaper and more liquid.

Gold coins

Coins are the way to go for a lot of private investors since they’re denominated differently in terms of content. Some coins have 1/2, 1/4, and 1/10 of gold content. An American Gold Eagle coin follows the current price of the precious yellow metal, which costs around $1,350. According to experts, diversifying with 5% – 10% of gold coins should be enough for one’s portfolio.

Gold online

If coins are still too expensive, you can purchase gold online without having to pay any brokers or middlemen. Not only are online gold investments cheap but they also shoulder the storage costs of your investments. The only problem with gold online is that you’re not holding your physical gold, which defeats the purpose of using it as a safe haven investment. In addition, purchasing gold on the web often means sharing the precious metal with other investors because you’re paying per ounce of the gold bar. Liquidating your online gold could have high premiums so watch out for this clause before buying gold online.

Holding gold can help in times of emergency and is a useful investment for investors to keep over a long period of time. It is only by owning a physical commodity like gold, which you can trade in times of an economic slump, that you can truly say that you’re financially stable.

7 comments

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  1. fin$avvy panda

    Great way to bring back the topic of gold! I haven’t been hearing it much lately. Of course when the economy is doing well, no one gives a damn about it! Haha I remember during the 09 to maybe 2012, so many ppl were speculating short term on gold. It was like the hot topic every day! Peeps were buying leveraged gold ETFs hoping to make money in the short term, but found themselves screwed when prices went south.

    Despite that, yes I generally do see gold as a hedge against bad times. I wonder when our next bear market is going to take place… hmmm lol

    It would be nice owning bars but as you say there’s that holding cost of a physical commodity.

    Again, nice post you have here. 😊
    fin$avvy panda recently posted…How To Save (and Spend) Money The Sexy WayMy Profile

    1. MrDD

      Since the middle of December, gold has started to pick up. Actually, I just swapped a few of my gold coins into silver as the silver to gold ratio is at or near a peak.

      I’ve always said that if you hold a gold coin in your hand you can really feel what money is.

  2. timeinthemarket

    Don’t know any gold myself but can see why people would want it – it’s got a good history of being a hedge against certain things and that’s likely to continue. I do wonder how cryptocurrencies like bitcoin will impact gold if they stick around past the next few years. There’s a lot of talk of that acting as store of value as well which is one of the selling points of gold but I’m not sure I buy that right now.
    timeinthemarket recently posted…Investing in cryptocurrency seems too easy – the risks and allure of bitcoin and altcoinsMy Profile

    1. MrDD

      It has often been said to have a small allocation to gold is a prudent thing to have as it acts as a counterbalance when the rest of your portfolio tanks.

  3. Mr Defined Sight

    It absolutely is viable! I’d recommend everyone to have some physical gold and silver. It does act as a hedge if the markets fall. If nothing else, just pass it down to the next generation.
    Mr Defined Sight recently posted…Thought Without Action Is MeaninglessMy Profile

    1. MrDD

      A lot of people seem to hate on gold, but it will always be there for you if you need it.

  4. Harriett

    excellent points altogether, you just won a emblem new reader.

    What might you suggest in regards to your submit
    that you made a few days ago? Any sure?
    Harriett recently posted…HarriettMy Profile

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