Precious metals continue to be a popular investment for many people who are looking to diversify their portfolios.
Buying physical gold has a number of benefits, which makes it an extremely attractive option. Here are five of the best reasons to invest in gold.
1/ Gold will always retain value
Unlike fiat currencies, which are created by governments, gold bullion cannot default or go bankrupt.
This makes physical precious metals an excellent safe haven against financial market fluctuations and economic disturbances.
Alternatively, fiat currencies tend to have an average lifespan of 27 years. Even the longest-running fiat currency, the UK’s pound sterling, has lost 99.5 per cent of its original value since being introduced in 1694.
2/ Hedge your portfolio
Many investors hold around 10 per cent of their assets in physical gold because it is an excellent way to diversify a portfolio.
This is because while there may be market fluctuations, as with any other investment, gold often responds differently to financial events. As such, people can reduce their exposure to risk on other assets.
While not usually considered the first choice for growth of capital, gold offers excellent protection and stability compared with other assets.
3/ Limited supply
Last year, the price of gold plummeted 28 per cent. This resulted in lower profits for gold miners and subsequently companies invested less money in finding new deposits of the precious metal.
As supply drops in the short- and medium term, existing holdings become more valuable until such a time when demand increases.
4/ Preserves purchasing power
Inflation can have a devastating effect on wealth, eroding purchasing power and leaving investors at the whim of political manoeuvring.
Gold typically retains most of its purchasing power, meaning an ounce of gold is likely to buy roughly the same amount of goods and services now as in the past (or future).
A common cited example is that an ounce of gold has been able to buy a decent men’s suit as far back as 1900, and remains within that price range today.
5/ Universal currency
Gold is a universal currency that is recognised and tradable worldwide. In fact, some bullion coins remain legal tender in their respective countries.
Many investors like to stash a small amount of precious metals close to hand in case of emergencies, although it is always recommended to store the majority of your bullion in a private facility for safekeeping.
Buying gold in Australia
If you wish to invest in gold, Guardian Gold and Guardian Vaults offer a seamless end-to-end solution that covers buying, selling, delivery and storage of precious metal assets.
Our consultants can help provide tailored advice for your specific circumstances, giving you the information required to make an informed choice when buying gold.
Furthermore, your investments are fully insured to protect against unforeseen circumstances, while state-of-the-art technology and security measures are installed to provide peace of mind.
Whether you are a first-time investor or an experienced precious metals trader, Guardian Gold and Guardian Vaults offer guidance.
