So far, 2020 has been a wild ride. Tumultuous and unpredictable to say the least. We’ve seen how quickly our financial security can be taken from us if we rely on our employment as our only stream of income. If 2020 has taught us anything thus far, it should be that diversifying your investment portfolio is the best way to ensure long-term financial security with or without a global crisis. As a major player in Montreal jewelry, we deal with a lot of gold and have been asked about investing in gold, whether that means buying stocks, gold jewelry or coins. Before talking asking questions like is gold worth investing in or is gold a safe investment, we should look at a few reasons to own gold and then decide if it’s best for you.
Why invest in gold? Every investment you make will have the potential to create profit or loss on your end. However, rare metals have shown a trend of consistent growth over the long term. Gold increased in over 18% value within the span of 2019 alone. Not only is gold currently riding an incredible positive wave in the market, but it also consistently retains value or appreciates during economic recessions. This is especially true today, as the U.S. stock market – which is inversely correlated to the price of gold- seems unstable with a very real risk of falling out over the next few years. If what economist are predicting becomes reality, gold will serve as an anchor to balance out your portfolio.
But what about the fear of you missing the train and or being too late for the party? Could gold prices be inflated right now, or could we be catching it at an all time high? If you only ask yourself “what is gold worth today” and take that number without context, it’s likely to come off as an expensive buy. Market analytics say this is unlikely, although not impossible. The price of gold is high right now, but as people continue to buy it we are almost guaranteed to see a rise in prices over the long term. People will continue to buy gold jewelry. We can’t predict the price of gold in X years vs. today, but most people who have owned gold long-term and continue to watch its value will tell you that they probably intend to keep buying it as long as they can afford to.
There are a few things to know before buying gold. We should evaluate the pros and cons of investing in gold. Gold is a commodity that will always hold value in human civilization, so it can be easily bought or sold. We’ve witnessed the presence of gold jewelry for generations. It is a finite resource, so there’s virtually no risk of its value collapsing. There is a long-standing market history with a track record that proves how it performs through a variety of circumstances, which means that there is a certain degree of predictability as to how it will perform in the future. The greatest pro in our opinion is that gold jewelry is an accessory that you can enjoy all the while appreciating as an asset. So your gold Rolex that you wore for 5 years will actually be worth more when you sell it (assuming you keep it in good condition) and you will still have had the experience of enjoying it for that amount of time. For the same reason, many people are buying gold jewelry in the form of Miami Cuban links, which can be heavier and more valuable than Rolexes. Plus, it’s entirely raw material. So it can be melted down and sold very easily. On the flip side, gold is an expensive commodity. You usually have to buy a large amount of it for it to be worth the investment. Finally, it’s something you probably want to hold in the long term, so it’s not a quick buck.
That’s the scoop on buying gold in 2020 from yours truly, Donj Jewellery. We will personally continue to buy gold, mostly in the form of cuban links, because we work with the stuff almost every day. Imagine sitting on inventory that almost constantly goes up in value! If you can afford to put some money into a braided chain and close your eyes for 10 years, it’s definitely something worth considering.
Interested in buying gold? Give us a call and let’s chat.