Why investing in gold bullion in 2020?

 Why investing in gold bullion in 2020?

There’s not a single moment in history where gold wasn’t treasured. You could look everywhere in multiple history books and there would be no time or place in the world where gold wasn’t one of the best ways to accumulate wealth. Today we have global markets, stocks, bonds, cryptocurrencies, and more – but there’s nothing that beats gold.

The crown was always made of gold and gold was always king.

Why is gold so valuable?

Gold was the main way to accumulate wealth. We all know the stories about banks and other organizations having secret vaults filled with gold. Or people risking their lives trying to find a sunk ship filled with Spanish gold.

Why are people so desperate to find and hoard gold? Because this precious metal is scarce. There’s a limited supply of it and an ever-growing demand. There are always ways to print more fiat money like dollars or create new cryptocurrencies like bitcoin. There’s no way to create more gold. It’s an inflation-free, high-value asset.

Because of this, gold was always used to hedge portfolios against inflation. In a worst-case scenario, gold maintains its current value – as it always does through recessions and other unstable economic periods. Gold either maintains its value or flies high – one only needs to check gold historical prices to verify this.

How can I own gold?

You can go old-school and purchase physical gold, in its many forms: gold bullions, minted gold coins, gold bars, among other options. Thanks to technology, there are multiple other ways to own your fair share of gold. Investing money in mutual who deal in gold, for example. Owning gold shares in mining companies is also a possibility.

Some examples

  • Gold bullions: Having a small percentage of your portfolio’s worth invested in owning gold bullions is never a bad idea. This way, you physically own gold in its purest form and you have it right next to you. As all things gold, it keeps or increases its value over time.
  • Minted gold coins: These coins have a legal tender face value in the country they were minted. Because of this, they are the most liquid gold asset there is – they are even easier to dispose of than gold bullions. Multiple countries have one minted gold coin of their own: America, Canada, Australia, etc. They are all worth their weight in gold!
  • Gold bars: Gold bars are usually owned by central banks – so that might give you a little bit of insight on how much they are worth and how important they are. Usually, they are found in 400 oz sizes, which is the standard London Good Delivery size. LGD gold bars are 99.5% pure gold – and worth every cent. Unfortunately, not many private investors get to own gold bars.
  • Investing in mutual funds: When you invest in mutual funds, you are not dealing with gold directly (as you would by owning gold bullions) but you are investing in a company that deals with gold and other precious metals in multiple ways.
  • Owning mining shares: Similar to investing in mutual funds, a mining share isn’t owning gold per se. Instead, you are investing money in companies whose primary activity is gold-related. While it might not be as safe as owning gold bars or investing in mutual funds, if the mining company is doing good, it’s the most profitable option here.

What’s the best gold-related investing option?

If you want a safe and cost-effective option, gold bullion bars are what you’re looking for. When you buy a gold bar, you’re dealing with and owning gold directly. It might seem silly, but being able to physically hold your gold will bring you comfort and peace of mind.

Photo by Dmitry Demidko on Unsplash

There’s a financial benefit to purchasing gold bars as well. Usually, gold bullion bars come with a dealer’s premium of 2% to 5%. Other options, like gold coins, far from 7% to 20%. Owning gold coins might be a little bit more expensive, but is the most liquid option of the two. Each option has its benefits and costs. Nevertheless, as a long-term investment, gold bars are the right option.

Gold bullion bars are the general go-to option when investing in gold, but you always have to assess your situation and see what works best for you to determine what you should invest in.

The best way to do know what works best for you is by contacting someone who deals in gold professionally – and that’s us. Feel free to message us, we are more than happy to help you become recession-proof by learning how to deal with gold and other currencies.

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