Most of the first time investors tend to stay away from investing in precious metals like gold. But, it’s not just an option for the wealthier investors. Interestingly, there are many misconceptions out there about gold investing. And, there are plenty of people who just do not have enough knowledge about this in order to make a solid decision. That’s why we’ve put together some of the most common myths and facts so that you can see why investing in gold really is a good option.
Myth: Investing in gold is a high-risk action
Investments based on paper currency valuation or those which are involved in the equity market heavily tend to be much riskier than gold investments. Gold is an in-demand and limited natural resource that is used by various industries that range from dentists to jewellery manufacturers and even the aerospace industry. What’s more, gold offers value as a hedge against some of the riskier investments, such as bonds and stocks.
Myth: You have to be wealthy to invest in gold
The fact is, you can buy gold in small increments, eliminating the need to hold stacks of gold bars or massive bags of bullion cons. You can also conduct easy and fast transactions at City Gold Bullion in Adelaide.
Myth: It’s just hard to invest in gold
This is probably one of the most common misconceptions, but it’s also an easy enough one to accept if we look at its recent history. In the past, gold certainly was not the easiest form of investment. But today, the method of investing in the precious metal and never even touching an ounce of the metal has become a reality. In fact, most storage facilities and gold brokers do all the work for you. So if you ever wanted to invest, it is achievable in life and easier than thought.
Myth: Gold will only increase in value when there’s speculation and fear
While is definitely a good hedge against market uncertainty, but there’s nothing fake about the need for a sceptical eye on the currency. For instance, America as over $19 trillion in debt and the dollar has lost a great deal of purchasing power over the past couple of years.
Myth: Stocks on gold mining is highly likely to do better than investing in gold
There are those mining stocks that have done pretty well over time, but it takes a quick look at the numbers to see just how gold will, as a precious metal, generally outperform the mines. For instance, between the years 2000 and 2014, gold soared in value by almost 40%.
Myth: Banks and governments control the price of gold, so no one can profit.
While there have been cases of banks trying to manipulate the spot metals prices, it has nothing to do with loss or profit. In fact, bullion markets are mostly determined by supply and demand. So, when there are plenty of buyers vying for gold, the price goes up. Both small and large investors have both made profits and endured losses in the gold markets.
Myth: Small investors battle to enter the metals markets
Gold and silver are actually suited to small investors. While there are certainly mark-ups on bullion bars, coins and rounds, anyone who is prepared to buy an ounce or more of gold will only pay a small mark-up over spot prices.