Gold has been one of the most sought-after assets for centuries, and for good reason. Its value has stood the test of time, making it a reliable investment option for investors around the world. Let’s explore the reasons why you should consider buying gold assets, and how to add gold to your portfolio.
Gold is a precious metal that has been used as a form of currency and a store of value for thousands of years. It is a tangible asset, which means that it has inherent value and can be held physically. Gold can be purchased in various forms, such as coins, bars, and jewellery. It is also traded on global commodity exchanges, making it a liquid asset.
Gold has a long history of performing well as an investment. Over the past 20 years, gold has shown an average annual return of around 9%, outperforming many other asset classes such as stocks and bonds. During periods of economic uncertainty or market volatility, gold tends to perform particularly well, as investors seek out safe-haven assets.
Gold has also maintained its value over the long term. For example, an ounce of gold could buy a high-quality suit in ancient Rome, and it can still buy a high-quality suit today. This is in stark contrast to paper currencies, which tend to lose value over time due to inflation.
Gold is often used as a hedge against inflation. When the value of paper currencies decreases due to inflation, the price of gold tends to rise. This is because gold has inherent value and cannot be printed like paper currency.
Buying gold can help diversify your portfolio and reduce risk. Gold has a low correlation with other asset classes such as stocks and bonds, meaning that it can help offset losses in these areas. This can help improve the overall performance of your portfolio.
Gold is often seen as a safe-haven asset during times of economic uncertainty or market volatility. This is because it is not tied to any particular country or economy, making it a reliable store of value.
Gold is a tangible asset, meaning that it has inherent value and can be held physically. This makes it a valuable addition to any investment portfolio, particularly in times of crisis when digital assets may not be reliable.
While gold can provide numerous benefits to your investment portfolio, there are also risks associated with buying gold. These risks include:
Volatility: Like any asset, the price of gold can be volatile. While gold tends to perform well during times of economic uncertainty or market volatility, it can also experience sharp price declines.
Storage costs: If you invest in physical gold, you will need to store it somewhere safe. This can come with additional costs, such as storage fees or insurance costs.
Liquidity: While gold is a liquid asset that can be bought and sold easily, it can sometimes be difficult to sell physical gold quickly, particularly during times of market stress.
There are a number of ways to buy gold, including:
Physical gold: You can purchase physical gold in the form of coins or bars. This requires storing the gold somewhere safe, such as a safe or a bank safety deposit box.
Gold ETFs: Gold exchange-traded funds (ETFs) are a popular way to buy gold. These funds track the price of gold and can be bought and sold like stocks.
Gold mining stocks: You can also buy gold mining companies. These stocks are typically more volatile than the price of gold itself but can offer higher returns if the company performs well.
When buying gold, it's important to manage your portfolio carefully. Here are some tips for managing your gold portfolio:
Diversify: It's important to diversify your gold holdings to reduce risk. This can be done by buying different forms of gold, such as physical gold and gold ETFs.
Stay informed: Keep up-to-date with the latest news and trends in the gold market. This can help you make informed investment decisions.
Set clear goals: Before buying gold, set clear goals for your portfolio. This can help you stay focused and make better investment decisions.
The price of gold is influenced by a number of factors, such as:
Economic conditions: Economic conditions, such as inflation and interest rates, can have a significant impact on the price of gold.
Geopolitical risks: Political instability or geopolitical tensions can also affect the price of gold.
Demand and supply: The demand for gold from investors and central banks, as well as the supply of gold from mining companies, can also affect the price of gold.
Gold investment products come in a variety of forms, each with its own advantages and disadvantages. Here are some common gold investment products:
Gold ETFs: Gold exchange-traded funds (ETFs) are a popular way to buy gold. These funds are designed to track the price of gold and can be bought and sold like stocks on a stock exchange. ETFs offer several advantages over other gold investment products, including lower fees, ease of trading, and no need for storage.
Gold mining stocks: Another way to buy gold is through gold mining stocks. These stocks are tied to the performance of gold mining companies, which can be more volatile than the price of gold itself. While gold mining stocks can offer higher returns than other gold investment products, they also come with higher risk.
Gold futures: Gold futures are contracts that allow investors to buy or sell gold at a specified price and date in the future. Futures contracts are typically used by institutional investors or traders and require a significant amount of capital. While gold futures can offer high returns, they also come with high risk and require specialized knowledge and experience.
Buying bullion: One of the most traditional ways to buy gold is by buying bullion in the form of coins or bars. This requires storing the gold somewhere safe, such as a safe or a bank safety deposit box. While buying bullion can provide a sense of security and tangible ownership, it also comes with storage and insurance costs.
When considering which gold investment product to invest in, it's important to consider your investment goals, risk tolerance, and investment time horizon. Additionally, it's important to research and compare fees and expenses associated with each investment product.
Gold has a low correlation to other assets, such as stocks and bonds, making it a valuable addition to a diversified investment portfolio. This means that gold does not move in tandem with other asset classes, which can help to reduce overall portfolio risk.
The historical performance of gold relative to other markets has been mixed. Over the long term, gold has generally outperformed inflation, providing a hedge against the declining purchasing power of paper currencies. However, the short-term performance of gold can be volatile and unpredictable, particularly during times of market stress or economic uncertainty.
In recent years, the performance of gold relative to other markets has been influenced by a variety of factors, such as:
Interest rates: The price of gold tends to rise when interest rates are low, as investors seek safe-haven assets that are not tied to interest rates.
Inflation: Gold has historically been used as a hedge against inflation, and tends to perform well when inflation is high.
Global events: Political and economic events, such as wars, recessions, or pandemics, can affect the price of gold by increasing demand for safe-haven assets.
USD exchange rate: Since gold is priced in US dollars, the strength of the US dollar can affect the price of gold. When the US dollar is weak, the price of gold tends to rise.
It's important to note that while gold can provide a valuable diversification benefit to a portfolio, it should not be relied upon as a guaranteed source of returns or a substitute for other investments. As with any investment, it's important to carefully consider your investment goals, risk tolerance, and investment time horizon before buying gold. Additionally, it's important to research and compare fees and expenses associated with each gold investment product.
Buying bullion is a traditional and tangible way to buy gold. Bullion refers to gold bars or coins that are typically 99.5% pure or higher. The process of buying bullion can vary depending on the dealer or seller, but generally follows a few common steps:
Research and select a reputable dealer: It's important to research and choose a reputable dealer before buying bullion. Look for dealers who are well-established, have a good reputation, and offer competitive prices.
Choose the type and quantity of bullion: There are many types of gold bullion available, including bars and coins of various sizes and weights. Consider your investment goals, budget, and preferences when choosing the type and quantity of bullion to purchase.
Place an order and make payment: Once you have selected a dealer and decided on the type and quantity of bullion to purchase, place your order and make payment. Payment methods can vary depending on the dealer but may include wire transfer, credit card, or check.
Arrange for delivery or storage: After payment is received, the dealer will either ship the bullion to you or arrange for storage at a secure facility. If you choose to store the bullion yourself, it's important to keep it in a secure location, such as a safe or a bank safety deposit box.
Consider insurance and maintenance costs: When buying bullion, it's important to consider insurance and maintenance costs. Bullion can be insured against loss or theft, but this can add to the overall cost of the investment. Additionally, bullion may need to be periodically cleaned and inspected to maintain its value.
Of course, this is a cumbersome and often costly process that doesn’t leave buyers with many options when they want to sell. That’s why Matador’s platform is changing the entire gold buying process and revolutionizing the market.
Matador is easy to use, and investors can buy gold with just a few clicks of a button.
Matador is a modern trading platform that simplifies the process of buying and selling gold. Using our mobile application, anyone can easily purchase, store, sell and ship gold. Our platform stands out with features like convenient buy now pay later plans, transparent pricing with low fees, and a unique loyalty plan that allows users to earn real gold.
Instead of worrying about logistics, Matador takes care of everything, handling your transaction in seconds, and storing the gold with custodians like the Royal Canadian Mint in Ottawa.
It’s time to start buying gold assets for your portfolio, and there’s no better way to do it than with Matador. Register today and experience a modern gold buying experience.