Many people among us don’t know that gold can be a lucrative investment with attractive returns. People make investments in gold to fulfil a range of goals. Given below are four reasons why investing in gold coins might be a profitable venture for you.
1) Gold coin investments
Gold coins are tangible assets that come with excellent resale value. Also, it adds a layer of safety. Investing in gold coins is much easier than buying other tangible assets like real estate. Moreover, digital assets are susceptible to hacking and other hazards. Gold coins investments are free from these menaces. So, buying gold coins is a safe investment.
2) Why invest in precious metals like gold? Portfolio diversification
Many economic experts have the opinion that gold is an extremely useful portfolio diversifier. This is because of its low-to-negative association with all other principal asset categories. However, as a convention, gold features no statistically substantial association with conventional asset categories.
Studies show that there is proof when equities are not performing well or otherwise stated, stock prices are going down speedily, there might be an opposite correlation between equities and gold. Gold safeguards the portfolio of an investor from unpredictability since the elements both at the micro-economic and macro-economic domains that impact the yields of majority asset categories don’t substantially impact the rate of gold. For a particular extent of yield from a portfolio, the hazard of unpredictability can be cut down by incorporating gold into it.
3) Why buy gold? Liquidity is one of the reasons
When you are in dire requirement of money, gold investments can be liquidated much quicker than other tangible assets such as real estate. Other forms of assets might feature a lock-in period but other than sovereign gold bonds, there is no lock-in period for gold coin investment. You can sell them whenever you want and make good money. However, the amount you would realize would also depend on some factors such as the denomination of the coins, pureness of the precious metal, and other elements such as the market rate.
If you have invested in paper gold, the market rate on the date of redemption is the deciding factor of how much you will redeem. While running short of cash, people also consider getting loans against gold.
4) Hedge versus inflation
At a time when inflation is escalating at an appalling rate, the currency rates are falling. You will find that in the long run, nearly every principal currency has gone down in value in correlation with gold. As a result, investors intend to hold cash in the form of gold. In periods of skyrocketing inflation, particularly in double digits over an extensive period, gold can work as a hedge against inflation and its other upshots.
Gold investments, particularly, investing in gold coins can benefit you in many ways. Not only is it a safe investment with high liquidity, but also a hedge against inflation. Besides, in times of geopolitical upheaval, other asset categories depreciate in value. However, gold rates rise since investors see it as a safe place for channelizing funds.