Before we begin let me give a quick disclaimer, this article is not financial advise and should not be treated as professional recommendation. Same with any other investments, I would highly encourage you to do your own research to learn all the risks involved
Last weekend, I decided to, and for the first time invest in gold. Gold jewelry to be exact. This is my way to diversify my investments and over the course of this blog I'll share my insights on why.
Towards the end of the year, I've been looking for what could be a good investment for this coming Christmas season. Something that is not too risky, which could also be a gift for myself and have a certain sense of utility. Gold checks all the boxes plus the bonus fact that it is tangible.
The good thing about gold is that it doesn't only come in physical form but can also be purchased digitally thru stocks and crypto. To diversify further, this is something that I'll be looking forward to accomplishing next year.
Cash is king however gold is the currency of kings. Comparing $100 worth of cash to a hundred dollars worth of gold after one year, ones cash will most likely have reduced purchasing power; in contrast to gold which will most likely appreciate not only due to inflation but its scarcity as well.
While both assets are certain to appreciate over time and share very similar characteristics in terms of intrinsic value, investing in real estate will require a huge amount of capital or will use up a huge chunk of your credit compared to gold wherein you can spend as little or as less than $50 for a piece. Another advantage of gold over real estate is that it is much more liquid and can easily be converted into cash during emergency cases.
Now this one could go either way. Both gold and stocks can have capital appreciation. Stocks can provide passive income thru dividends. Gold does not generate passive income. If there's one advantage of gold is that it is tangible and has lesser volatility risks compared to stocks.
Half of the available gold in the world is used in jewelry. A small portion on tech and medical products, and the rest as reserves of bank or countries in vaults. The traditional way of investing in gold is to purchase jewelry and holding onto it until such time that you can sell or pawn it for more than what you paid for. A personal tip I can give you when buying physical gold is to purchase it per gram (according to weight). Jewelry shops or businesses that sells per piece has usually high mark up values.
If you're not into storing or wearing gold products. Another way to invest in this precious metal is thru the stock market thru exchange traded funds. It's like buying gold but instead of buying the physical element itself, your ownership is recorded thru the stock exchange, similar to owning a company stock. You can also invest in gold mining companies. More on this on a future post.
Need to diversify even further? Or want another way to invest in gold? then look into buying gold-backed cryptocurrencies. The way I describe it is similar to stable coins. Wherein instead of fiat money being the backing asset gold is used instead. You can look into Paxos Gold (PAXG) to know more. Rest assured I will also be looking more into this space and create a post once i have gained enough experience.
