With the economy still in such a volatile place as the COVID-19 pandemic comes to an end, many are looking for alternate ways of storing their wealth that are less susceptible to the ups and downs of the economy. The stock market is a good way to grow wealth, but if an impending crisis is drawing people in and out of it rapidly it could end up making you lose your hard earned cash in an instant. So with that being said, many people are turning toward things like gold and other store of value assets in order to avoid losing investment money if the economic crisis were to worsen. Here are three reasons to invest in gold. You can buy gold at a Dana Point gold exchange such as Gems N’ Loans.
Unlike assets like stocks or cryptocurrencies, the value of gold is not determined by how many people are also investing in it. Gold is considered a store of value asset because it will always hold its value to a certain degree. While the price may fluctuate a small amount on a day to day basis, it will never lose a large amount of its value in the long term because it’s a precious metal that we only have a finite amount of.
Why is the value of gold not determined by investment demand? The reason that gold will hold its value long-term is because it’s a precious metal that we only have so much of. Unlike currency, which government organizations can print an infinite amount of in order to combat inflation, we can’t make more gold. Assets that are finite, like gold or real estate, earn more value long-term because they become more scarce.
Keeping your money in exchanges or banks can be risky if those banks and exchanges fall to data theft or electronic manipulation. Although many are backed by the FDIC, they are still at risk of being hacked. Things like cryptocurrency exchanges are even more risky, as they’re not FDIC insured leaving you vulnerable to losing everything if someone were to get into your account. Gold investors don’t have this worry, and if you keep your gold safe you can be rest assured that it won’t be as vulnerable to digital theft.