You’ve already heard that gold is a wise investment, having performed consistently well in terms of value growth for decades. But, what is it about gold that makes it so sought after, and such a valuable asset to your portfolio?
For centuries, civilizations have lusted over gold. Wars have been won and lost, new discoveries have been made, and empires have been created and destroyed all over gold, and the wealth it can potentially bring. If history shows us anything, it is that gold is always more reliable than stocks, bonds, or other types of currency.
From an investment standpoint, gold is considered by many experts to be a safer or more reliable investment. For instance, in times of crisis, gold values often reach a peak, as they did during the Afghanistan invasion over 30 years ago and the credit crisis in the late 2000s. The stock market, on the other hand, is not so reliable. In fact, in 2009 on the heels of stock market collapse, gold reached a significant milestone: a price of $1,000 per ounce. While that was an important achievement in the history of gold value, it is expected to be trumped, with the price of gold being predicted by some forecasters to rise between two and five times that amount over the next several years.
Gold also serves as a hedge against inflation, as well as a hedge against the declining dollar. In addition, the demand for gold is increasing globally, especially in large countries like China and India. Demand for gold is outpacing supply across the world. Gold is also a much more secure stored investment. Said simply, gold will not “fall through the cracks” in an investment or accounting scandal. If the market collapses, you still have your gold stored safely.
Aside from just the investment advantages, gold has been popular among people throughout history for many reasons. Gold is unique to other precious metals, which is why many jewelers use gold as a preferred jewelry-making metal. It is malleable, shiny, and soft, and is able to be perfectly blended with other metals. It also has a strong resistance to corrosion, a key characteristic for long term storage and collection.
Gold does not have as many functional uses as silver, which is used in industry and manufacturing much more than gold. Some small amounts of gold are used as false teeth, and it is sometimes used in electronics due to its durability and its ability to act as a conductor, but again, silver is used for these purposes much more frequently. The truth is, most gold is simply stored, either in vaults or in jewelry cases, and is consistently gaining value in the meantime.