As You Become Financially Stable, Is Gold a Viable Investment to Add to Your Portfolio?

Being financially stable means that you have an adequate amount of resources to support yourself even during difficult times. Investors try their best to become financially stable by diversifying their portfolio, which means holding different investments in the form of cash, commodities, and stocks. One commodity that has been popular for centuries is gold. While it may seem outdated to invest in gold, there are still benefits that will help you stay financially stable.

Gold is a finite currency, which makes it a valuable legal tender that is accepted in most countries. Owning gold could help cover your assets when currencies are failing, especially in times of inflation. When more money gets into the system, the more the value of a currency decreases. Venezuela’s current state of inflation is an extreme example but shows how quickly currency can devalue.

There’s no denying that gold still plays a significant role in today’s economy. When the economy is doing bad, gold prices go up and vice versa. Check the prices of the precious yellow metal when The Fed’s aggressive bond-buying program was still in operation in 2011. Based on FXCM’s gold price chart, the precious yellow metal’s prices at that time soared up to $1,900 an ounce. Gold is also a valuable commodity because unlike other metals like copper there is no expiration date. While its value may increase or drop depending on economic and global events, it still remains a valuable asset.

Gold bars

The best way to own gold is to have direct investments, meaning owning physical gold bars and not mining stocks or ETFs. Gold bars yield the highest profits because of their purity, which is graded by the London Bullion Market Association (LBMA). The problem with investing in gold bars is that they don’t come cheap. A bar with gold’s current prices cost approximately $528,000. In addition, storing them takes a lot of money. For this reason, most investors choose gold coins which are a lot cheaper and more liquid.

Gold coins

Coins are the way to go for a lot of private investors since they’re denominated differently in terms of content. Some coins have 1/2, 1/4, and 1/10 of gold content. An American Gold Eagle coin follows the current price of the precious yellow metal, which costs around $1,350. According to experts, diversifying with 5% – 10% of gold coins should be enough for one’s portfolio.

Gold online

If coins are still too expensive, you can purchase gold online without having to pay any brokers or middlemen. Not only are online gold investments cheap but they also shoulder the storage costs of your investments. The only problem with gold online is that you’re not holding your physical gold, which defeats the purpose of using it as a safe haven investment. In addition, purchasing gold on the web often means sharing the precious metal with other investors because you’re paying per ounce of the gold bar. Liquidating your online gold could have high premiums so watch out for this clause before buying gold online.

Holding gold can help in times of emergency and is a useful investment for investors to keep over a long period of time. It is only by owning a physical commodity like gold, which you can trade in times of an economic slump, that you can truly say that you’re financially stable.