Do you often wonder how the wealthy maintain their wealth all this time? How despite the hard times, they are still able to maintain their lifestyles and not worry about their wealth evaporating the minute the stock exchange crashes just like what happened in 2008?
Have you ever heard of the saying, “do not put all your eggs in one basket”? This seems to be the motto for rich people. It means that you should be diversifying your investment portfolio. But how diversified should your portfolio be?
A basic diversified portfolio often includes stocks, bonds, mutual funds, money market funds, and exchange-traded funds. These are good investments but these investments often rely heavily on the stock exchange. If in the event that the economy experiences downfall, then your investment’s value will likely go down with it.
This is why it is also important to invest or own something that you can physically see like real estate. However, it can be quite expensive to own real estate properties. But you know what else is a good investment that you can physically see and further diversify your portfolio? Gold coins.
Why you Should Invest in Gold Coins
Gold is a precious metal that has been woven into the history and culture of possibly every civilization on the planet. In the past, people who are members of the royalty and those with a high rank in the community often adorn themselves in gold jewelry. Gold used to be the ultimate symbol of wealth in ancient times.
In the most recent past, the value of gold has steadily increased and the demand for it even increasing. In India where gold and jewelry are an essential part of any wedding events, the demand for gold spikes up in October, which is the wedding season. In China where owning gold bars is a common form “savings”, the demand is always steady.
Once you have made up your mind and want to buy gold coins as an investment, make sure that you buy it from a reliable and trustworthy seller. It is also worth it to know the nuances of the gold industry. Learn what your Gainesville Coins gold investment options are and choose wisely to maximize your profits.
If you are interested in investing in gold coins, here are 5 more reasons why you should invest in it.
1) Protection from Inflation – Inflation is defined as the increase of the value of the basic goods or the decrease of the purchasing value of money can be hard on the consumers since their money basically costs less when there is inflation. However, when you have gold, there is basically no need to worry because when inflation increases, the value of gold also increases with it.
2) Protection from Deflation – Deflation in economy basically means that the cost of basic needs has decreased and the inflation rate is in the negative. Although it may sound good, it actually is not good. The reason behind this is that deflation often results in less growth in the economy, high unemployment and low demand for goods.
But for gold, the value basically stays the same if not increased. The reason is that, during deflation, the people tend to hoard cash and investing those cash in gold is the best option rather than keeping loads of cash at home.
3) Protection from Geopolitical Crises – Geopolitical crises are always on the news since time immemorial. Recently in Europe, the tension has been high since the United Kingdom announced that they want to exit the EU. This event has triggered an increase in the value of gold since people tend to invest in it when there is a crisis.
4) Production has Lessened – Gold production has lessened in the past years although the demand for it has been steady. The lessened production can be accounted to decreased numbers of gold mines churning out gold for the market.
With the lessened production paired with steady demand, the price of gold is only expected to increase.
5) Diversifying your Investment Portfolio – A key to maintaining your wealth is diversifying your portfolio so that you are not relying on just one investment to gain interest. Investing in gold coins, in addition to bonds and stocks ensures that when the bonds and stocks prices fall, you have gold coins to fall back on.
Although the price of gold is erratic in a short term period, the price has steadily been increasing as the years passed on. So if you do invest in gold coins, you have to keep it for a longer time period and not a short-term investment.