1. Gold is a real, physical asset that you own.
We all like to own assets. Some, like cars, depreciate as soon as we buy them. Others, like property and land generally rise in price although, as we all know, there are downturns in property values from time to time.
But the attraction of any physical asset is that it is real and in your ownership. It is yours and you can touch it.
It’s the same with gold. When you buy a gold coin it is yours and in your possession. It is a physical asset. This physical ownership of gold becomes particularly important in times of dramatic economic reversals.
As an asset, gold is independent of countries, governments, currencies or credit worthiness.
2. Gold protects you again sudden market fluctuations.
A significant proportion of North Americans own shares, in one form or another. Perhaps through their company retirement funds or personally held retirement savings plans.
Investing for our retirement is a good idea. But our money is vulnerable to the ups and downs of the market. Of course, as individuals we have no control over market fluctuations. When the markets go up, we are pleased, even though we did nothing to make it happen. When markets go down, we bite our nails and hope for the best.
But sometimes markets literally crash. It happens at least once in most lifetimes. And a market crash can lead to the loss of all your savings, literally. If all your money is tied up in investments, you could lose every penny.
But gold is not susceptible to stock market fluctuations in the same way. In fact, when things go south on the stock markets the value of gold generally rises.
A stash of gold is a great thing to have in the event of a crashing economy.
3. Gold protects you against inflation.
Inflation is the great destroyer of personal wealth. High inflation can dramatically reduce the value of the dollar, euro or yen in your pocket. Last month a dollar might buy you a loaf of bread. Next month, in the case of hyper-inflation, that loaf of bread might cost ten dollars or a hundred dollars.
Again, when inflation strikes, the value of gold tends to rise. Gold is the great balancer. It’s the safe haven. When traditional assets and investments are decimated, the value of your gold will usually rise.
Of course, things never work out quite as neatly as we might like. While gold has done a good job at being a haven for your wealth in times of inflation in the past, that doesn’t mean it will always be that way.
As with all markets, the gold market is nothing if not surprising.
4. Gold can never be “lost” or debased by your employer or the government.
Governments can make all kinds of unilateral decisions that result in the debasement of your money. Your money can be devalued overnight, and there is nothing you can do about it.
Companies which manage retirement funds can behave unpredictably or even fraudulently. We all know of companies which have gone bankrupt, leaving employees past and present with no money in their investment savings.
Unless you have a remarkable level of trust in your government and employer, you might want to buy some gold. With gold in hand, you always have an option. You always have some money at hand.
5. Gold is easy to buy and takes up almost no space to store.
There are now many places where you can buy gold over the internet. Most have a few extra safeguards in place, so it won’t be quite as easy as buying a book on Amazon. But you can find a dealer online, and place your order at any time. Once your payment has cleared, your gold will be shipped to your home.
Once you have your gold in hand, it’s time to store it. How you do that is up to you. Remember, you can own tens of thousands of dollars in gold and store them in a very small space.
6. You can cash in your gold with no penalty at times of emergency.
If you suddenly need cash in a hurry, you can take one or more gold coins down to a dealer in your town or city and redeem them for cash on the spot. It’s not like selling shares or digging into a savings account. There are no penalties for selling gold, and the transaction can be completed in the time it takes to get to a dealer.