In India, for a variety of reasons, people attach a high value to gold and consider it to be both precious and auspicious. For those who came of age between the 1950s as well as the 1990s, the value of gold as a measure of societal standing or worth was ingrained in their minds.
However, investors now can buy assets that might yield attractive long term returns, such as stocks, as well as passive income, such as mutual funds and P2P lending.
This allows investors to diversify their portfolios and potentially increase their profits. The question now is… how does gold stack up against these other investments?
As we’re going to learn in this account, ownership of gold comes with a variety of advantages as well as potential drawbacks.
But the price of gold had a great deal of volatility in 2020. Now, without further ado, let’s find out if investing in gold in the year 2021 is a wise decision or not.
5 Benefits Of Investing In Gold
1. Stable Price
1. Stable Price Therefore, investors like to include gold in their portfolios so that they can benefit from the consistent price and value growth through time.
2. Easy To Buy
If you do have the necessary funds, purchasing gold from any reputable jeweller is a straightforward process. Nevertheless, it is essential to purchase gold that comes with a purity guarantee. You can purchase gold in forms of jewellery, coins, or bars, all of which are made of gold.
3. Better Versus Inflation
Even though both gold and fixed deposits are considered to be preferred traditional investments, fixed deposits never outperform inflation in the same way that gold can. The evidence from the past indicates that gold is a good hedge against inflation during both economic booms and busts.
When the economy is doing poorly, currency prices tend to follow suit and fall. Because gold would be priced using that currency unit regardless of the value of the currency, the price of gold will skyrocket if the exchange rate has no value. This suggests that purchasing gold as a hedge against inflation is one of the most effective ways to do so.
4. Steady Growth
Gold’s price doesn’t appear to be affected by the fact that this is a limited resource, despite the fact that gold is a finite metal. It is common knowledge that, over the course of many years, its price will steadily go up. On the other hand, the price of gold is prone to wild swings in the near term.
5. Easy Loans
Gold may be put up as collateral for loans that are secured by it. Due to the fact that gold is a tangible item with a high value, it is much simpler to obtain a loan against gold. In the event of a crisis, this might prove to be helpful.
Aside from these five advantages, the sentimental worth of gold is something that just cannot be ignored. Gold is a precious metal that is traditionally associated with significant life events like weddings and family anniversaries, among other occasions.