If you are planning to invest and considering gold as one option or if you are just planning to buy gold and thinking if it is still worth it to own or invest in gold in 2021 then this article is only for you. After going through this full article you will understand 5 main reasons why you should be getting gold whether as an investment or casually.
We have mentioned this a lot of times in our previous posts as well that gold is something which was used as a currency in the past and that too worldwide so it has a history of value backing its future. Holding gold or investing in gold is nothing new to the market like cryptocurrency. when currencies falls it has always been the gold on which we fall back. An investment or an insurance for tough times, whatever you call it. I think I have given enough overview now lets start with the 5 reasons.
History backing it up and making it a safe investment
Gold has maintained its value throughout decades. It has been used as a way to preserve and pass wealth to next generations. Other than the financial value the metal has its own properties which makes it precious and people love to acquire gold especially in India.
No entry barrier now
Previously, anyone who wants to invest in gold was required to have at least a certain amount to acquire some quantity of physical gold. Now things have changed, we have options like digital gold which removes the entry barrier in gold investments or purchases as you can buy gold for even as less as 10 rupees and if you are worried about is it safe or not then you can go through the last article we covered. All you need is a smartphone and internet connection which is easily accessible after the Jio’s internet revolution. JIO changed the whole telecom market and it is still offering amazing services for free one of which is JIO missed call alert service. We will cover this topic some other day, for now lets get back to gold.
US dollar getting weak
There’s no doubt in the fact that US dollar is one of the world’s most important currency. When the value of important currencies like dollar falls, it is backed by security of the Gold and hence the price of gold rises In last 2 decades gold has seen a firm growth and it has folded its value further.
Inflation Secure & Deflation protection
Inflation is rising at high rate and according to historical data, gold has always been excellent security against inflation. When the purchasing power of currency declines, the prices of gold rises with everything else hence gold investments secures people from inflation. It is common practice among investors, when they see currency falling, they increase gold investments. When the economy is under debt, the economic activities slows down which was last seen in 1930s or 2008 is also considered but it was not a major deflation that time. The price of gold hiked even when the prices of other things dropped. People went on to put their cash into gold because of the rising value.
Demand & Investment Diversification trend
The demand for gold has seen a good rise in the past few years due to multiple factors. Gold has emotions attached, especially in some culture rich countries like India, acquiring gold is way more than just an investment because of the emotions attached to the precious metal. Even in china, gold bars are a traditional way of savings. In the list of largest gold consuming nations, India grabs the 2nd position and that too because china has more population than India. In India gold is seen as investment or savings by some and for majority of people it is a kind of wealth indicator whether it be weddings or such occasions gold is gifted a lot. Now more and more people in the nation are getting aware of the value of investments hence value of gold as an investment is also rising in India and when it comes to investments, there is an important term Diversification.
Diversification basically means investing in multiple areas which are not closely related like gold and stock markets are negative correlated. When the stock market dips, gold rises and vice versa. Diversification in investments add on a layer of security as even if one investment source could achieve good returns or falls, then there is something else to look upto. You must have heard from at least someone that Never put all your eggs in one basket, that is what diversification means.