It’s estimated that 10.8% of Americans own gold. It shouldn’t come as a surprise that the precious metal we’ve used as currency for thousands of years is still popular.
However, gold jewelry is far from the only use that gold has these days. The reality is that buying gold bars for your investment portfolio is an extremely wise financial decision. Why?
Because of the many benefits that gold has even during times of economic downturn. In this guide, we’ll go over some of these reasons, as well as the different types of gold you can invest in.
That way, you start reaping the benefits of this precious metal as soon as possible.
1. It Maintains Value Better Than Currency
Ever since ancient times, a gold bar has been valuable. And that’s not likely to change anytime soon. The value of gold does rise and fall. However, it does so at a much more stable pace than currency.
That’s because the value of currency can be affected by a variety of different factors. Take the United States dollar as an example. Despite being one of the most important currencies in the world, its value has plummeted in recent years.
This is often due to political and economic influences like increases in supply, budget spending, and trade deficits. Gold often isn’t subject to these influences. As such, it represents a more stable investment option for many individuals.
2. It’s Recession-Proof
During every major recession over the past one hundred years, the price of gold has soared following every stock market plunge. Why is this? Because when traditional currency fails, buyers run to buy gold.
This, in turn, increases the value. In this day and age, inflation is inevitable. But a supply of gold can provide you with a bit of security to protect you against the ebb and flow of the economy.
The key is to avoid buying gold during hard times when the prices are high. Instead, purchase them when the value of the dollar is fairly strong. That way, you can get more and protect your other investments from potential recessions.
3. It’s Easy to Sell
Many people like owning gold bars and coins because there’s no middleman with their investment. If you ever need money, you don’t need to rely on it to gain access to your gold.
Moreover, gold has a high liquidity. There are tons of gold dealers and buyers online or in-person you can turn to if you need to sell it. If you’re desperate, you can turn to pawn shops.
However, it’s unlikely that you’ll get the full value of the gold when you go with these buyers. Keep in mind that this only applies to physical gold that you own. If you own stocks in gold, then they’re not as liquid in the marketplace.
4. It Provides More Privacy
While this might not be important to everyone, many people value gold bars because of the privacy offered for their finances. When it comes to banks and other financial institutions, they’ll know everything about what’s in your accounts.
And, if the government wants to access these accounts, they can. If they want to freeze your accounts or confiscate funds, they can. With physical gold, you can store it anonymously.
Just keep in mind that there is a potential downside to this. Storing it anonymously doesn’t have the same security as other institutions. As such, you’ll need to invest in protection like safes if you want to keep it protected from potential criminals.
5. It Provides Portfolio Diversification
As we mentioned before, gold has a negative correlation when it comes to other financial institutions like stocks. That means that when stocks fly, gold prices drop.
But, when gold prices rise, stocks drop. When it comes to investments, it’s never a great idea to put all your eggs in a single basket.
That’s why gold can be so valuable for a portfolio. By diversifying with precious metals, you reduce the overall risks associated with your investments.
What Are the Different Ways You Can Invest in Gold
This article has discussed the benefits of physical gold like gold bars, gold bullion, and raw gold. However, it’s important to note that these aren’t the only ways you can invest in precious metals.
You can also buy stock in gold mining companies. Or, you can buy mutual funds in gold-related assets.
A gold futures contract allows you to either buy or sell a certain amount of gold bar weight at a later date. Discuss the different gold buys with a professional to find the options that work best for your portfolio.
Where Is the Best Place to Buy Gold Bars?
Unfortunately, in the world of gold investments, there are a lot of scammers looking to take advantage of you. You can avoid these individuals by knowing where to buy gold bars from reputable dealers.
A dependable seller will never arbitrarily raise the price of gold on you. They’ll also avoid hitting you with huge transaction fees for a simple purchase.
They’ll also offer a wide selection of gold products that you can choose from. How do you find these sellers? Research is important. One thing you can do is by doing a background check using the National Futures Association.
This can reveal a lot of information about a seller. Online reviews can also be a good tool. An overwhelming amount of negative reviews is a clear sign that you should look elsewhere.
Ultimately, the best advice is to go with your gut. If you feel like a seller is pressuring you into a purchase you wouldn’t otherwise make, you should look elsewhere.
Appreciate Learning About the Benefits of Buying Gold Bars? Keep Exploring
We hope this guide helped you learn more about the benefits of buying gold bars. It’s important to remember that like any economic investment, gold isn’t perfect.
However, compared to other types, it provides stability and value that cannot be ignored.
That’s why it should be an essential part of any investment portfolio. Want more investment advice similar to this one? Keep scrolling through our website to find plenty of similar content you’re sure to enjoy.