Considered for years as a “safe haven”, gold has always been associated with wealth and power. If you want to invest in this precious metal, it is better to take the time to study these strengths and weaknesses. This will help you make a mature decision. Is it a good or a bad idea to invest in this yellow metal? You will find its pros and cons in the article.
The benefits of investing in gold
Gold is best known for its economic stability. This is the reason why it has been considered as a “safe haven”, especially during crises.
Apart from its economic stability, gold reflects luxury and beauty. It is used by jewelers or luxury watchmakers to make pendants, earrings, rings, watches and other products. Its value has been steadily increasing for years.
As it is an exhaustible and non-renewable resource, the quantity of gold is limited. This awareness of limits increases its value, because the rarer a metal becomes, the more valuable it is.
It is also necessary to diversify your portfolio to have better profits. Gold is a good alternative if you want to make other investments apart from the usual investments.
The disadvantages of gold
Despite all these advantages, it is nevertheless risky to invest in gold.
The first is the fact that gold has no real use. It has no added value for production and is not essential for life. Unlike other metals, gold has no real uses in daily life. For example, medicine uses money and other electronic products.
You should also know that gold does not generate income unlike stocks and investments. The reason is that he has no regular cash to pay out to investors.
Since gold is a physical material, keeping it comes with storage and security costs. Over time, this impacts profit as gold shows an average return.
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