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In times of uncertainty, gold can seem like an attractive option… but is it really a viable long-term investment?
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Two Cents was created by Katie Graham, Andrew Matthews, Philip Olson CFP® and Julia Lorenz-Olson and is brought to you by PBS Digital Studios. We love dropping some knowledge on all things personal finance and helping you make better money decisions.
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Two Cents is hosted by Philip Olson, CFP® and Julia Lorenz-Olson
Directors: Katie Graham & Andrew Matthews
Written by: Philip Olson, CFP® and Julia Lorenz-Olson
Executive Producer: Amanda Fox
Produced by: Katie Graham
Edited & Animated by: Andrew Matthews
Images by: Shutterstock
Music by: APM…(read more)
LEARN ABOUT: Investing During Inflation
REVEALED: Best Investment During Inflation
HOW TO INVEST IN GOLD: Gold IRA Investing
HOW TO INVEST IN SILVER: Silver IRA Investing
Should I Invest in Gold?
Investing in gold has always been a popular investment option, particularly during times of economic uncertainty. Gold is often seen as a safe haven investment, a tangible store of value that can help protect investors’ assets in times of financial turmoil. However, before making any investment decisions, it is essential to consider both the advantages and disadvantages of investing in gold.
One of the main advantages of investing in gold is its ability to act as a hedge against inflation and currency fluctuations. When inflation rises, the value of paper currency tends to decrease, but gold’s value often remains relatively stable. Therefore, investing in gold can help preserve wealth, as it holds its intrinsic value over time. Similarly, during currency fluctuations or economic crises, gold is often considered a reliable store of value.
Furthermore, gold has a long history of being a universally recognized form of currency. It is accepted worldwide as a valuable asset, which makes it highly liquid, allowing investors to easily buy or sell gold whenever they desire. This liquidity factor ensures that gold can be converted into cash quickly, facilitating an investor’s ability to respond swiftly to changing market conditions.
Additionally, gold has the potential for price appreciation. Its limited supply and increasing demand, particularly from emerging economies, can drive its price higher over time. Although gold prices may be volatile, long-term investors have historically seen positive returns on their investment in gold.
Despite its advantages, gold also has some disadvantages that should be taken into account. Firstly, unlike stocks or bonds, gold does not generate any income. It does not pay dividends, interest, or rental income. Therefore, investors should solely rely on its price appreciation to earn a return on their investment.
Another drawback of investing in gold is that its value is solely based on market sentiment and demand. Economic and geopolitical factors can significantly influence gold prices, making it susceptible to sudden price swings. Therefore, investors must be prepared for fluctuations in the value of their gold investments and should consider it as a long-term investment rather than a short-term trading opportunity.
Furthermore, when investing in gold, one must also consider the costs associated with buying and selling physical gold. Investors need to factor in transaction costs, storage fees, and insurance costs. These expenses can eat into potential profits, particularly for small-scale investors.
Lastly, the value of gold can be affected by factors specific to the mining industry. Production costs, new discoveries, and technological advancements can influence the overall supply of gold, thus impacting its price. Similarly, environmental concerns surrounding mining activities can deter some investors from considering gold as a sustainable investment option.
In conclusion, whether or not to invest in gold depends on individual risk tolerance, financial goals, and portfolio diversification strategies. While gold has served as a store of value for centuries, investors must carefully weigh the advantages and disadvantages associated with this precious metal investment. Ultimately, it is advisable to consult with a financial advisor who can provide personalized advice based on an individual’s investment horizon and objectives.
Gold is okay, but currently, I personally lean into the stock market because of liquidity and all. I’ve been sitting on over $545K equity from a home sale and I’m not sure where to go from here. Is it a good time to buy into stocks or do I wait for another opportunity?
When gold dropped to below $300/ounce, it was a dead ringer. You couldn't go wrong investing in it. But now that Gold is sky high in value, it seems that you are almost guaranteed to lose in the long run.
Besides, how can gold be valuable in a collapse. Less people would be able to afford it and more people will want to sell it.
Bottom line is, only buy precious metals when they are low…very low.
Pro tip for 3rd world country folks like me :Physical gold is worth more than virtual ones on screens
gold is a currency not investment !
Gold is to preserve your wealth, not create wealth. Also you need to ask what kind of gains are you trying to create (long term, short term) at the end having a diversified portfolio is the way to go.
You don’t buy gold to get rich. You buy gold to not get poor.
If you don't like contributing to the growing power of banks and the government it runs, precious metals is your ticket. If you have a business, cash and precious metals only. Gold for saving, silver for spending. Using fiat is locking your own shackles
I'm from the future. The real money is technologically essential metals especially bismuth, indium, thallium and tellurium.
As an investing enthusiast, I often wonder how top level investors are able to become millionaires off investing. . I’ve been sitting on over $745K equity from a home sale and I’m not sure where to go from here, is it a good time to buy into stocks or do I wait for another opportunity?
If you look at counties like Venezuela where their currency is useless, I don't see anyone over there trading Gold. Also if hypothetically, Gold will be of value if our dollar dies, chances are unless that actual physical gold is in your house, someone will simply run off with it and you'll never see them again.
Strange that all of the governments in the world stockpile it in huge vaults while telling people gold isn’t important.
gold is about $2,000 an ounce. bury 1 once of gold and $2,000 underground in 10 years that ounce will be worth more guarantee. but not by much, gold is insurance not an investment.
Yes.
A thousand times yes.
Tell that to Turkey and Argentina. Gold is not inflation hedge, gold is anti system hedge. It will be outlawed sometime in the future.
You didn't know this when the video came out, copper is a good investment now.
In India we have 2 other ways to invest in gold called Sovereign gold bonds and Digital gold, you should research about them, these are more advantageous and interesting than physical good or gold etfs
Gold is not to make wealth ,it is to preserve it. Plus it helps to balance our portfolio.
A fairly big percentage of gold is used in electronics particularly in smartphones and other smalle electronics because it's a great conducter and super reliable
Gold is an important part of any diversified portfolio. It is commoditized and offers good returns over time