Should You Invest in Physical Gold?
UPDATED: March 2022
Should You Invest in Physical Gold? - Even though physical gold offers you one of the best ways to diversify your portfolio, you also get a tangible and solid asset that may help you when times get tough. Due to its reliability, many investors consider investing in gold. It's not only a safer option but also gives them great returns on their investment.
Should You Invest in Physical Gold?
As with any investment, you must consider the drawbacks associated with it. So, if you're wondering if you should invest in physical gold, you've come to the right place. We will weigh the pros and cons right here.
1. Finding a Place to Store Physical Gold
If you choose to invest in physical gold, figure out where you would want to store it. Will you store it at a big safe at home where you can keep your collection of gold coins? You can also choose to store it in a safe deposit box at the bank as well. However, in both cases, your gold will be vulnerable to theft. Most people don't have the means to store their physical gold, and some people prefer to have a pooled account that helps them keep their physical gold safe.
You can keep your gold in a vault, and you will get a numbered coin or bar allocated to you, or you will get a record of the exact gold that has been assigned to you. If you choose to store your gold with an allocated account, you will need to pay an insurance fee and a storage fee. If you have an unallocated account, you won't need to pay much in fees, but your gold will remain in the company's name, which puts you at risk if the company goes out of business and the creditors get their hands on your gold.
So, if you store gold onsite, you risk the threat of your gold being stolen, and if you choose to keep it offsite, you may not get access to it when you want it.
2. What Will You Use Investing in Gold For?
Most people consider gold to be "pure money" since it has been used as a medium of exchange for centuries. Many people are tempted to buy physical gold since it offers them a great way to protect themselves from an economic collapse. However, if the global market collapses and there is a financial meltdown, who will be in a position to buy your gold?
When the entire system breaks down, gold won't be valuable as a commodity to barter items. You can't use gold for shelter or clothing, and you can't eat it. Ask yourself; who will accept your gold in exchange for survival items because, in these situations, gold won't help you.
Conclusion of Should You Invest in Physical Gold?
When deciding whether to purchase physical gold or invest in physical gold, ensure you are investing for the right reasons and know the consequences of your investment. Having tempered expectations will ensure you can make the best, informed choice for yourself regarding investing in gold.
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