Editorial Invest in Slovakia
One of the options for investing free funds is gold, which has been a symbol of wealth and stability since time immemorial. In today's article, we'll take a look at gold as a form of investment, its benefits and its risks. Let's do it!
We would like to start this article with an indisputable fact, which is that gold protects money from depreciation, due to inflation. Its price tends to rise in turbulent times of political uncertainty, during war conflicts and so on. However, whether gold is a suitable investment instrument or simply a store of value has long been a matter of controversy in investment circles. The aim of today's article is not to take one side or the other, but rather show the positive and negative aspects of investing in physical gold.
By exchanging money for gold, the investor gains several advantages. First of all, gold is very easy to store and also significantly more space-saving, compared to a larger sum of money. It is a metal that does not change its shape or texture over time and does not depreciate in any way. And since gold is not very bulky, it can be used, if necessary. easily portable.
The second advantage is its anonymity. Whether you invest in shares, funds or hold money in a bank account, there is always a value attached to your currency. This is not the case with gold, whose distribution around the world is not coordinated by any one organisation. It is a kind of anonymous preservation of the value of your money.
The third main advantage of investing in gold is its relatively high liquidity. Gold has always been, and is expected to continue to be, interesting for both investors and ordinary people. With gold you physically have something in your hands that you can sell in an emergency, and quite quickly. In many countries, it is also tax-free.
The arguments against investing in gold are clear. The biggest risks you need to prepare for are uncertain demand for gold in the future, maybe change in the understanding of the value of gold for the future and also the growing Competitors in the form of digital currencies.
The good and bad thing about gold is that it can be recycled almost indefinitely, unlike oil, for example, which is simply consumed after use, creating a new demand for it every time.
The understanding of the future value of gold is also questionable. While in many cultures gold has historically been associated mainly with jewellery and decorative purposes (e.g. Asia, Mediterranean, etc.), its understanding may change, which would mean the potential slump in the price of this precious metal.
Last but not least, in today's digital age, gold is growing big competitors. We are talking about imaginary currencies, perhaps the most famous of which is Bitcoin. Many young investors prefer to invest in the new electronic form rather than the historical gold form. As is the case with gold, Digital currencies also give investors the advantage of anonymity, as well as direct acceptance by traders.
Over the past 20 years, however, gold has seen average growth of 9.1% per yearwhich makes it continue to be an interesting investment opportunity for investors with a higher risk tolerance in the long term.
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