Why invest in gold?
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We find “why invest in gold?” is one of the most frequently asked questions we receive. Apart from the fact that investments in gold make perfect sense during financial crises, it’s also a much sought-after asset class for creating a wealth-building portfolio. But how much gold should an investor’s portfolio have? In a report published by the World Gold Council, $7.5 trillion is the total value of all the gold mined on the planet so far.
This is approximately 4% of the total valuation of the international markets, spanning equity, bonds, stocks and precious metals. So, a great starting point is to have 4% gold in your overall portfolio to begin with. Of course, investors tend to step up their gold investments as time goes by if they believe that gold is likely to outperform over a certain length of time. For example, August 2011 was one such time when gold peaked at over $1990 per troy ounce. At the time, many investors pulled out of the global capital markets and moved their investments into gold.
5 ways you can benefit from long term gold investments
- Firstly, gold is a hard tangible asset that does not tarnish, diminish and or devalue over the years. Given that gold has continually appreciated in value, buying now can mean that your investments bear fruit in the later years of your life.
- Many investors do not prefer to hold physical gold and instead invest in gold futures, or gold ETFs. However, we must remember that these investment vehicles carry counterparty risk. Counterparty risk is the risk posed by a counterparty. For example, if you buy gold backed paper ETFs, the company issuing the paper purchases certain amounts of gold to back your paper certificate. However, the company also sells similar investment vehicles to other investors. What is there isn’t enough gold to back the paper in the event of a market crash? Then you run the risk of losing your money. On the other hand, if you hold gold in its physical state, you avoid this risk altogether.
- Gold is an excellent choice of asset class that can serve as ballast to form a strong and unshakable base for your diversified portfolio. What’s more, they are tax-free.
- Fiat money, stocks and bonds are all subject to the forces of inflation, while gold is not in the short term. Over the longer term, gold is also subject to inflationary forces. However, we must remember that gold delivers value in the long-term. This is why it’s such a great long term investment.
- Building a gold portfolio is easy. Why not register for a free account on Physical Gold, select the gold you need and add it to your online shopping cart. You will find three types of gold that are available on the website. You can get a monthly saver account and invest into this through a SIPP. There is a Pension Gold option that you can explore or simply buy gold coins and bars and opt for our secure delivery and storage option.
Buying gold coins as part of your legacy portfolio
Gold coins also make a great investment and they are stylish, sleek and can be stored as bullion over generations. Physical gold has excellent purchase options in the 1oz Gold Britannia coins, 1oz Canadian Maple Leaf coins and the 1oz Gold Krugerrand. Every product carries an authenticity certificate and a buyback guarantee. If you choose to store your wealth in one of our LBMA approved vaults, we will send you a storage agreement along with legal documents that establishes you as the rightful owner of the assets. When you give them away to your children or grandchildren, you simply transfer the rights, without having to take delivery.
Speak to our investment experts to discuss how to build a lasting portfolio
Our team of gold investment experts are always happy to advise you on what products to buy and when to buy them. Call us on 020 7060 9992 or contact us through our website to speak to our gold investment team, who can help you plan for your long-term investment goals.