Stock markets can fall fast. An investor can spend their whole life working up a safe portfolio and in one day it can all come tumbling down. You might think that you’re the one who can foresee it — but the truth is that at the end of the day, these things are unpredictable. To defend against the unreliable market, many people have invested in precious metals.
There’s a good reason why. An investment in metals is like no other investment. Let’s look at a few reasons why it’s important for you to consider investing in more durable forms of currency.
Most people know something about gold and silver, but few consider what investing in one means vs. investing in the other. Each metal has a different value, different advantages, and different properties.
Gold, the most volatile precious metal to invest in, has the advantage of reputation. Gold was most likely the first metal used by humans. Because of this history and reputation, gold has value in itself, even though there aren’t many industrial uses for it beyond jewelry.
What does this mean? It means that gold, unlike the dollar, will always mean something. It’s not limited by the normal laws of supply and demand. When people are selling gold, prices go down — when they’re buying gold, prices go up.
Silver also has a certain reputation. However, silver has many more industrial uses — such as for LED chips. There’s a very good chance it will have even more uses in the future.
This means that silver’s usefulness is determined by its physical merit — again, something that cannot be said for the dollar.
For more information on gold and silver, check out the section of our website devoted to gold and silver.
As mentioned before, the price of gold depends on who’s selling gold. Like a stock-market investment, gold can be bought low and sold high. But unlike a stock-market investment, an investment in gold is always in your hands.
Picture this: you study the stock market, you make some smart investments, the stock market crashes. What do you have to show for it? It could be years until the market turns around.
Now imagine another scenario: you invest in gold at a low price, you continue about your business, the stock market crashes. You still have gold in your possession that you can touch and feel, which may become valuable again at any moment since gold has value in itself.
While the price of gold constantly fluctuates, it’s a very sound investment.
You don’t have to be told that gold was one of the first metals used by humans to understand its universality. You only have to go across the ocean.
In the event that you have to flee your home country, it’s important to have money that you can be sure of. Exchange rates in currency between countries are constantly changing. By investing in silver and gold, you’re converting your money into a currency that will be valuable wherever you go.
It’s no doubt that objects with inherent value are the most universal form of currency.
To learn more about exchange rates, read another one of our blog posts.
One of the beauties of this kind of investment is that you do not need to rely on anybody else to take care of your assets. Think of all of the instances of credit card fraud, the ease at which a cyber-criminal could steal cryptocurrency.
Sure, there’s always the threat of a burglary, but with an investment in valuable metals, you can trust yourself to keep your investment safe.
When inflation strikes, gold thrives. Not only is gold an investment that doesn’t shift in price during inflation, but people turn to it in rough times.
Another situation to consider: you invest in gold, there’s an inflationary spike, everyone suddenly wants to buy gold. You, as the gold investor, suddenly have your pick of people to sell gold to and make a good return on your investment.
If you fear inflation, consider looking into precious metal prices, and you can turn inflation into something you can profit from.
This may already be apparent from what came before, but it’s necessary to emphasize just how crushing a depression can be. We’re still reeling from the Great Recession of the 2000s. Many middle-class families got crushed doubly.
Downturns in the economy cannot be ignored by anyone of any social class. If you’re in the middle class you may feel secure in your job, and you may be reaching for something higher. Never forget how easily a crash can destroy things, especially if you have a family.
No matter who you are, you’re going to want to depression-proof yourself as much as possible. One of the best ways to do this is to make a secure investment in something tangible.
In China, the demand for gold is rapidly increasing. Due to needs in jewelry, China, already one of the world’s lead consumer’s in gold, is expected to increase its need for gold rapidly.
As said before, gold doesn’t abide by standard laws of supply and demand. The economy could jump all over the map, and gold would still retain its value.
Consider trends develop and considering opportunities to make money off the Chinese gold demand.
Metals, unlike other investments, tangible uses. Gold is currently being tested for cancer treatment purposes. Silver can make a name for itself in 3D printing.
While we already have many uses for gold and silver, their potential future uses cannot be underestimated. As our technology rapidly advances, we only find more uses for gold and silver.
While you may put off investment in precious metals, their value will always stay constant. When it comes down to at the end of the day, you should invest in gold and silver because they are a stable investment. They’re something you can hold in your hand, and in this modern world of constant acceleration, that’s more than you can say about most things.
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