11 Reasons Why You Should Invest In Physical Gold
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Gold has been an age-old tradition among Indians. However, some simply buy it because it is a part of tradition without a clear reason to invest in the metal.
However, we don’t invest in things simply based on traditions right, so let’s dive into why gold is a good investment and why investing in gold is more than just a tradition.
11 Reasons Why You Should Invest In Physical Gold
1. Protects Against Inflation Risks
Gold is an Inflation proof investment. Meaning inflation can’t affect its value in the market.
The nation’s currency value may decrease in time, but the intrinsic value of gold doesn’t decrease, it may remain the same, or it may increase.
Historically speaking, special metals like gold perform well during economic meltdowns and market crashes.
This is not the case with most other investment options, they tend to fall with an Economic Meltdown. m
Having at least 10% of your investments money in gold is a good choice from an investments standpoint.
2. You Don’t Need To Be Smart
With gold, you don’t need to think too much. It’s easy, go to your neighbourhood gold shop and buy gold at a price you’re comfortable to pay.
There’s no need to study gold like you would study real estate or famous paintings or a rare item crafted in the 80s.
The process is simple and straightforward, no-hassle and no prior knowledge.
Whereas if you’re planning to invest in the stock market, you need to search for profitable good reputable companies, check out their bonus shares timeline, their dividend timeline, PE ratio, net earnings, balance sheet and 59 other documents before investing in it.
Yea you could skip all this altogether by blindly investing or hiring a financial consultant to do the work but the process is tough.
But with gold, you’ll only have to look at when the prices are low (if you don’t mind waiting) and buy and fetch your gold instantly. No knowledge required!
3. Helps in Diversification
Does anyone remember Warren Buffett talking about Diversification? If you don’t remember, he said that diversification is good and you must Diversify your portfolio.
A simple way to do that is buying some gold. It helps you hedge against your stock portfolio and it grows in value over time. Good is a precious and valuable metal and it’s beautiful too.
More reasons to consider keeping gold in your portfolio. More people are turning their focus to gold today, thus the prices are increasing steadily.
It’s time you shed some money to invest in physical gold. It’s worth it!
4. Gold Hedges Your Stock Market Portfolio
Have you ever heard of the financial term Hedging? Hedging means using financial instruments or market strategies to reduce your risk when investing.
When I say you can use Gold to Hedge Your Stock market Portfolio, I mean you can offset risk and stabilise returns with gold.
If you always worry about the stock market crashes and all your money being wiped out of existence, hedging your investments is the option you need to choose right away.
There’s data that suggests that gold negatively impacts stocks, i.e if the stock market crashes, prices of gold rises.
Gold prices are usually stable with no decrease in value, it drastically increases in value when stock or stock investment equivalent decreases like the recent 2023 dip in the stock market caused Gold prices to rise at an all-time high.
Note: It’s not mandatory for gold prices to rise every time some other Investment market crashes, but research shows that gold proves to be safer when the market crashes.
5. It’s a Tangible Asset
If you buy physical gold, you can feel it, hold it in your hand and see it. You can’t do this with stocks, bonds, or most other investments.
Real gold is valuable and tangible, you can’t destroy it by fire nor by water. Gold doesn’t even need watering, grass, fertilisers or feeding of any sort.
Just keep it in a locker or sleep with it at night and it’ll be the same next morning. You can buy as much gold as you wish and there’ll still be a lot of gold left for others.
Plus the shine of real gold has made us feel privileged and happy, doesn’t it!
6. Good Long Term Investment
People buy gold and keep it safe for years and years. Gold is a long term investment and does a phenomenal job at not losing its value even in 10, 20 or even 30 years.
It’s still precious, the price has increased multifold, and it’s a haven for those trying to minimise risks and maximise returns.
7. Gold Is The Perfect Gift
Gold is a high-value product. You can sell a small coin of gold and easily get half of your salary in exchange.
Gold is precious and it also looks precious plus it’s appreciated a lot. One of the main reasons why gold prices keep going up is because of the love aspect of gold.
Gold Jewelry gifting is famous in Indian and some other countries in the world.
Gold is a low maintenance gift, so the person you give it to won’t spend a penny trying to repair it or shine it.
You don’t even need a special three-level stage authentication locker to store it, a normal locker at home will do or you can store it with your bank locker at a fraction of the cost.
8. Easy To Buy & Highly Liquid
Gold is easy to buy and very easy to sell. It’s highly liquid and thus can be sold to anyone or an authorised gold store to get instant cash.
You can even carry it in your pocket and roam the whole world! I’m sure Tesla stocks can’t be carried in your pockets. Even stocks are highly liquid today but gold takes it a step further.
With any online investments, first, you have to sell, then money gets credited in your investments account, then you transfer it to your bank account, finally, you withdraw the money in the form of cash.
With gold, you simply go to any pawn shop, local dealer, authorised gold shop, a private party or your friend and get cash right there.
It’s more liquid than most investments. If you feel uncomfortable travelling to a country with cash, carry gold and later convert it to cash as and when necessary.
9. Gold Is Off Digital World (Confidential)
Off the digital world! Yes please, I want to invest all of my money on it! Today everything you buy or invest in is somehow linked to the digital websites, that means it can be hacked.
Data can be erased, stocks vanished. Even if companies promise you their software is highly encrypted and safe to use for investment purposes, some elite hacker always can hack the system and steal your valuable possessions.
Physical Gold is off the digital world and is thus untouchable to such thieves.
Investing in digital investment instruments like stocks, futures is great but it’s safer to invest a part of your money in intangible investments that are not a part of the digital web like Gold and Real Estate.
10. You Feel Rich
Let’s just be honest, gold feels premium, it feels like a hundred thousand dollars even if it’s a thousand dollars. Gold can make anyone’s day a happy day.
Try giving some gold to someone, I’m sure they won’t be disappointed. Buy gold for yourself, wear it as an ornament or keep it in lockers as an investment.
It’s one of the best tangible assets that you can see, feel, touch anytime.
11. Easy To Get Approved For Loan Against Gold
You can never expect a crisis wave hitting you, you may never know what’s about to happen. In such cases having gold will save you from the financial crisis.
Banks easily approve loans if you have gold. By showing the bank the gold you have, they’ll provide you loans at a lower interest rate too.
You can easily liquidate your gold investment for instant cash that you can use for emergencies.
Practically you should have an emergency account for such emergencies but if that amount fell short or maybe you don’t have one yet, liquidating your gold can truly be a blessing.
Is Good The Best Investment?
I wouldn’t say that! There is no best investment out there as each type of Investment has its pros and cons.
Some believe Real Estate to be the best investment out there but ask the people who’ve found success in Real Estate and they’ll tell you about the high stakes required to land a good deal with adequate profits.
There are so many things that affect the prices of a property, one small mistake and your property depreciate instead of appreciating.
Stocks have their cons, the biggest one being that we can’t control the outcome, if company X performs badly in the financial year, its stock prices will surely go down and all the people invested in that stock will bear losses.
The benefits of gold are stated above, it’s an asset that has been in this world for generations and will continue to remain for many generations moving forward.
It also diversifies your portfolio and even though you’re hungry for maximum profits, diversification is essential to invest some money in gold.
Do you like gold? What percentage of gold do you have in your investment portfolio? I suggest > 20% is good! Let me know in the comments!
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