The Key Features of Investing in Gold

Gold has long been very popular with investors all over the world. In a volatile economic climate, having at least some gold in your investment portfolio is often recommended. But why is gold such a good investment? There are a number of advantages of having gold in your portfolio, and here are some of the main ones.

Diversify Your Portfolio

The old adage ‘don’t keep all your eggs in one basket’ is very true with investments, and gold helps to diversity your portfolio. Although gold prices fluctuate like any other commodity, if you have an investment account then it can be a great way to improve its performance.

Protection Against Inflation

One of the benefits of gold is that its prices often rise when inflation hits. When investors turn away from stocks in such periods, historically the same panic does not affect gold. For that reason, it is a useful hedge against inflation, and inflation-adjusted returns for gold have been very good recently.

Protection from Currency Fluctuations

Whereas currencies can devaluate rapidly, gold provides a hedge against this risk. Indeed, historically, as the US dollar has weakened gold has usually gone the other way.

Seen as a Safe Haven

Gold is often seen as a safe haven for investors. With the recent banking crisis and the risk of bank collapses and erratic government actions, many investors like to have gold in their portfolios to avoid too much risk. Whereas other forms of investment may collapse, gold tends to remain relatively stable.
Liquidity

If you own gold bullion in the form of coins, it is quick and easy to convert these into cash because buyers are always ready to snap up gold. Gold is accepted all over the world, and another advantage is that physical coins can be transported easily.

Universally Appealing

Not only is gold accepted all over the world, but it is also universally appealing. This rare and beautiful metal has a certain allure, making it a popular option for investors internationally.
How to Invest in Gold

There are different ways to invest in gold if you decide that you would like to include it in your portfolio. One option is to invest in physical gold, usually in the form of coins or bars. However, another popular option is to invest in a Gold ETF, which stands for Exchange Traded Funds.

If you decide to invest in gold ETFs, it can be more secure than holding real gold, and it can also be more convenient. It can also be very quick to buy and sell, and may be useful for short-term investments. However, you will be charged an expense ratio each year, which is the annual fee charged by the fund to cover admin and management costs.

Consider Investing in Gold

There are many advantages of having gold in your investment portfolio, so it may be worth considering investing in either gold or ETFs if you have not yet done so. As with all such issues, make sure you get professional financial advice before deciding upon anything as everyone’s individual situation is different.