Among the countless precious metals on the market, gold and silver are, perhaps, the most in-demand. And, if you’ve been looking into these two assets, you’ve probably heard of countless claims. For one, a lot of people argue that gold and silver are popular simply because of their appeal as shiny metal. You’ll also hear that these metals are extremely volatile.
However, there’s a reason why even veteran investors have their fair share of gold and silver investments. Not only are they aesthetically pleasing, but they also have considerable value.
So, what makes gold and silver good investments?
1. Both Materials Are In High Demand As Materials For Jewelry
Jewelry has always been a luxury to most people, but it remains one of the most sought-after products on the market. As such, any material that can be used as jewelry is usually in high demand. That applies to both gold and silver. Furthermore, these precious metals are considered non-renewable materials, which means the demand for them is only bound to increase.
In fact, if you look into the price history of these assets, you’ll find that their price has increased over the past few years, and even decades. But, that’s not what makes them good investments.
2. Gold And Silver Are Very Accessible And Liquid Assets
Profit is, typically, not the main contributing factor as to why investors purchase gold and silver. Instead, investors invest in these assets because they’re simply very accessible.
You can buy and trade silver with Gainesville Coins and similar websites, at your local store, through a broker, or from a bank. The same goes for gold. But, more importantly, you can also sell them very easily, hence, why investors consider gold and silver as two of the most liquid assets on the market. For your info, a liquid asset is an asset that can be turned to cash easily.
3. These Precious Metals Are Not Influenced By Inflation
Inflation is one of the many driving factors of asset prices. With inflation, you’ll see assets like stocks, bonds, equities, and currencies rise or fall in price very easily. During these times, it can be difficult to invest in an asset due to the possibility that the price may drop drastically. But, that directive doesn’t apply to investments like gold and silver. One can say they’re inflation-proof.
That means regardless of whether the country is experiencing hyperinflation, the price of gold and silver remains in the same price range, but, of course, there are slight changes. That’s precisely why investors often invest in gold and silver during inflation. Doing so allows them to make sure their cash won’t depreciate in value even after the currency drops in price.
4. You Can Keep Them Physically Or Digitally
The disadvantage of most assets nowadays is that they remain as a digital entity until you withdraw them from your account. This means they’re at risk of cyberattacks. On the other hand, you can choose to invest in silver and gold in their physical forms, or keep them digital. Regardless, the fact that you can choose from two options makes for a good investment.
5. They Can Diversify Your Investment Portfolio
Unless you’re only starting to get into investing, you should know of the importance of diversification. Diversification is the practice of allocating your funds to different assets.
Doing so allows you to maximize the overall returns of your investments in the event where each asset reacts differently to the market changes. It’s essentially the opposite of putting all your eggs in one basket. You invest in different assets in hopes that the gains will exceed the losses. And, as you may have guessed, investing gold and silver is an excellent way of diversifying a portfolio.
6. Gold And Silver Are Universal
Before visiting a foreign country, it’s advisable to convert your money to their currency first. This is because your destination most likely doesn’t accept the currency of where you’re from. For example, if you visit Thailand, a US Dollar would effectively lose its value, unless you can convert it, one way or another. But, that’s not the case with gold and silver.
Wherever you are, these precious metals retain their intrinsic value. So, whether you’re from a first-world country or a developing country, you can still benefit from such investments.
While it’s true that both gold and silver can bring several benefits as investments, they’re not one and the same. They carry varying benefits, so you don’t necessarily have to invest in both to achieve optimal results. Depending on your goal, you can just choose from either of the two, especially if you’re only planning to diversify your portfolio with a precious metal investment.