According to the latest surveys, almost half of economically active people in our country invest. No wonder. In recent years, even the staunchest opponents of investing have understood that leaving money in an account is simply stupid. Why should you enrich your portfolio with gold?
Long term horizon
The vast majority of average Czech investors focus on the long-term investment horizon. That means 15, 20, 25 or more years. It is quite clear that a number of unexpected economic disasters will occur in a given time period. For that reason, it is really not possible to magically time the market.
This is precisely why you should rely on regular purchases of selected ETFs, bonds and, of course, gold. The deeper these commodities sink, the more you buy them. In the long term, this is a proven and functional tactic for generations.
Balancing the portfolio
A very important part of success is portfolio diversification. It is generally recommended that you hold around 60% equity ETFs (ideally stocks that track US, European and global markets), 25-30% bonds (more government bonds and less corporate bonds) and of course 10-15% gold.
This is because all three components of the portfolio behave differently in certain situations, thanks to which you minimize the risk of huge losses while maximizing the potential profit over the years.
A counterweight in times of crisis
This brings us to how such a portfolio probably behaves in times of economic growth and crises.
In times of growth, you can count on nice growth in stock ETFs and bonds. Likewise, a slow increase in the value of gold is assumed, which roughly follows inflation.
Real fun only comes in times of recession, war, pandemic, energy uncertainty and the like.
It is precisely at these times that stock ETFs and bonds begin to fall. In some cases by 30, 40, or even 50%. It’s a disaster, don’t you think? It then takes many years for them to return to their original value. However, you can’t always afford to wait.
For that reason, it is a great choice investment gold. In times of economic disasters, the given instrument starts to increase its value nicely. Based on research, it has been proven that in 8 out of 10 cases, the yellow metal behaves opposite to ETFs and bonds during recessions. It is therefore considered a universal tool, with the help of which you can mitigate the effects of any crisis and partially protect your portfolio.
Another advantage of gold is less volatility than the other two opportunities. So, for example, if you only have a few years left until retirement, a more stable value is the obvious choice. After all, you don’t want to delay your retirement for, say, five years before battered volatile markets get back to their original value.
A little about performance
And what is the historical performance of gold? Quite interesting. Admit it yourself.
It has increased its price by 391% in the last eighteen years. In the last seven by 75%. In five years by 62% and in the last year by 12%. It is by no means a weak instrument, as many uninformed individuals think.
Swiss bullion
In the Czech Republic, the most popular form of gold is mainly Swiss bullion from the Argor-Heraeus refinery. You can safely recognize the products by the unforgeable hologram on their back. This proves the origin, purity and weight of each individual piece.
Do you want to buy gold bars at the lowest price on the domestic market? Then don’t forget to look at the websites of suppliers from the well-known company Zlatovna. They will send you both small gram and large kilo bricks in an instant. Click the link above and check out their offer for yourself.
