Myths Surrounding the Purchase of Gold
Gold is one of the, well, gold standards among investments in physical commodities. It has also been an investment phenomenon in most parts of the world in the past decade. However, there is an ocean of misinformation that misguides gold buyers. Owing to the myths, gold is misunderstood by many investors. This has led them to keep such a valuable asset out of their portfolios. From calling gold a bad investment to defaming it to be overvalued, there is no limit when it comes to myths. First-time investors usually shy away from buying gold jewellery thinking it’s an investment option only for the wealthy.
A Peek into the History
The myth of the hidden city of El Dorado is proof of how a simple myth can be the reason for mass hysteria. During the early 16th-century, Spanish conquistadors ventured into South America in search of El Dorado. They got a whiff of the myth about the existence of this city made of solid gold. The thought of laying their hands on all the fantastic impending wealth captured their imagination. Trusting this myth led the conquistadors to start an infectious search. While there was no city of gold to be found, the madness for gold did result in tragedy and treachery. All for a myth! You see the danger of acting on myths, don’t you?
Centuries have passed, but many myths surrounding gold prevails even today. Are you an investor in precious metals? Or do you want to do it sooner or later? The first thing you should do is to steer clear of the common myths about purchasing gold. Here, we will bust some of these myths. This will not only help you wade through the sea of deceptive information but also make wise choices.
Myth 1: You Have To Be Rich to Buy Gold
This is the most common misconception people have when it comes to buying gold. The truth is, you don’t have to be super rich to invest in this precious metal. In fact, the yellow metal is one of those physical commodities you can buy based on your budget. Gold doesn’t decide your budget; your budget decides gold. For instance, if your budget is around 25,000, you could consider buying plain gold bangles, necklaces, pendants, or even gold coins. The best part of buying jewellery as investment is that it has usability.
Depending on your budget, you can also invest in gold in forms other than jewellery. You need to decide on the quantity of gold to buy as per the live gold prices on the day of making the investment. Also, there are many gold investment companies that assist their clients to buy gold down to very small increments. Thus, you don’t have to buy stacks or bags of gold bars or bullions in one go.
Myth 2: It’s Very Difficult to Buy Gold as Investment
This common fallacy is easy to accept considering the recent history. Gold wasn’t always an easy investment in the recent past as it was not easy to store. Even those who could easily afford gold found it difficult to store it safely. And the result? Sleepless nights and countless anxieties! Things have changed for good these days. Now, you can invest in the precious metal without even having to physically touch it. Many gold brokers and also secure, specialised storage facilities do most of the work for gold investors.
Myth 3: Gold Is Not a Good Investment
The truth is quite the contrary. Smart gold investments often give good returns. Gold can act as both an insurance product and also an investment option against dropping equity prices. It counters lows in the economy and recession periods. Therefore, investment in gold gets due thought by many smart investors. It doesn’t matter if you are joining a gold investment plan or buying small trinkets such as gold pendants or nose pins as a form of investment. Gold is always considered a good investment option, as against diamond or platinum which doesn’t the same resale value as gold.
Myth 4: It Is Too Risky to Invest in Gold
Every investment has its own advantages and risks. So has gold. But the risk factor doesn’t make gold a less favoured option. When it comes to comparing the risks in investments, those that depend on valuations of paper currency or those in the equities markets tend to be riskier. Gold is a rare natural resource, which is always in high demand. It is also used by diverse industries, including jewellery manufacturing and aerospace, among others. Gold is valuable as a hedge against inflation and riskier traditional investments, such as stocks and bonds.
Myth 5: Gold Is Worthless Compared to Cash
In ancient recorded history, gold was money for more than 6000 years. The different forms of currency and wealth we know today are fairly recent. And they can all be assessed in terms of the weight of gold. Many key banks all over the world have gold bullions in their safes and vaults. Doesn’t that in itself dispel this myth that gold is worthless compared to cash?
Myth 6: Gold Is a Safe Investment
Like any other investment, purchasing gold has its pros and cons. It is just another asset, and it comes with risks. Calling it a safe haven for investment is not a smart move. Gold is quite volatile. Although the risk of underperformance is low in gold bullion, there are instances when it has lost a majority of its purchasing power. To ensure you make wise investment choices, avoid keeping all your eggs in one basket. The same applies for gold investments too.
Gold is quite a powerful tool when it comes to investments. Believing these myths will make you lose the opportunity to diversify your investment portfolio with a valuable asset. Gold offers protection against inflation. It might also provide better returns as compared to many traditional assets. When you take your time to evaluate the many benefits of investing in gold, these myths stand no chance of misguiding you. Debunk the myths surrounding the purchase of gold to become a smart investor and enjoy its benefits.