In a previous blog post called the gold standard of investing for 2023, I shared why I think gold is potentially due for higher prices in 2023 compared to its lacklustre performance during the 2020’s.
In this article I’m going to explore TEN benefits to owning gold as an investment choice, and why the elite of society are known to include gold as part of their portfolio.
But before I do, this is not financial advice … it’s only my opinion. I really mean it and don’t want you to take this as a cue to go out and buy gold. I’m merely sharing my perspective on it as information, not advice. So please always do your own due diligence, take responsibility because that’s how you become sovereign.
(See more in the disclaimer at the bottom of the article)
10 Benefits to Owning Gold
1. Performs Well in High Interest Rate Environments
Gold’s performance during levels of rising interest rates is unparalleled, during times interest rates are being raise you can almost see a direct correlation with the increase in the price of gold. You can see the comparison over the years in my gold standard of investing in 2023 blog.
2. Store of Value
Gold is known by many as a great store of value. There are a number of reasons why … firstly it’s a tangible asset – a real item you can touch and feel. Even with the rise of digital influence on society people still love real assets, especially when it comes to storing and preserving wealth. Outside of this, gold has been used as a medium of exchange going back to ancient civilisations. Its track record of being valuable keeps its price relatively stable which is why there’s speculation that gold will continue to be valued by society moving forward.
3. Long Term Investment
Playing multiple roles as a store of value, a method of diversification, a safe haven asset and a strong history of being valued (many of these I am covering today) many investors believe gold is a great long-term investment. In a way, it’s a buy-and-forget type of investment with little maintenance involved. Further, historically it’s acted as an insurance agent from financial and currency resets. (Note this doesn’t mean it’ll happen again as past performances aren’t indicative of future performances).
Another benefit to owning gold is it can play an essential role in a balanced portfolio. It has a lot of characteristics many other asset classes lack. This allows it to stand strong in a portfolio when other assets may be losing value. It’s the basic principle of “one is a dangerous number” or “don’t put all your eggs in one basket.”
Moving forward … gold can be diversified upon itself even further. Think of not only gold bars but precious metals as a whole … there are coins vs bars and for the really big gold fans out there you can even look at purchasing shares of gold mining companies.
In our elite investing, Global Wealth Mastery Program, we explore this deeply with Silver Bullion SG.
5. History Backed
Ancient Egyptians, Greeks, Romans, Incas and….. you get the point. Gold has a strong history of being valued not only in the last decade or century but for as long as reports into ancient civilisations are known. It doesn’t guarantee it’ll stay the same moving forward but if history tells us anything.
6. Safe Haven Asset
In times of uncertainty, danger and unpredictability gold has always performed well. We only have to look back to the previous years during COVID-19 and the Russian invasion of Ukraine to see gold touch its all-time highs in both of these scenarios. See the image below:
The elite look at gold as a safe asset to own during these unpredictable times because it creates an insurance policy against unforeseen events, which is a strong benefit to owning gold.
Aside from its aesthetic value there may be more to gold jewellery than what meets the eye. Firstly it’s the most easily transportable form of wealth you’re able to take with you wherever you go (perhaps outside of a card linked to a bank account) making it an easy way to store wealth in a fashionable and transportable way.
This is potentially one of the most beneficial reasons to gold because it allows you to transport your wealth if the need arises to quickly flee the country or province (unlike property which is much harder).
It’s also worth mentioning that during the gold confiscation in the US 1933 (Executive Order 6102) gold jewellery was mostly exempt which goes to show there’s always loopholes around the system and ways to protect your wealth.
8. Accepted Worldwide
It’s not only the western world which places a high value on gold. Indeed gold is a sought-after metal in all parts of the world, highlighting another benefit to owning gold. The more places (and therefore people who want and are able to own gold) the greater the demand to supply ratio.
Being accepted world-wide also is very handy in travel cases, as people all over the world can buy gold.
TIP: Travelling with gold coins can be a great insurance policy should you ever run into a pickle and need cash quickly.
9. Multi-Jurisdictional Wealth
Gold opens up many avenues to being able to store wealth in different jurisdictions. The elite have used this for decades as a way to store value outside of their home country – a form of asset protection. Being able to diversify one’s wealth with a stable and inflation resistant asset in another country helps to lower risk of having all your wealth stored within one country should issues ever arise there.
This is why I personally hold a portion of my gold and silver in Singapore as opposed to solely in Australia.
10. Liquid Asset
With the historic value placed upon gold and potentially ever-increasing demand of it, a lot of investors are seeking to buy gold from you or others. This is a highly advantageous aspect to gold because when funds are needed, there’s always the possibility to liquidate gold holdings regardless of the economic environment. Liquid assets create more freedom of choice and movement … key principles the sovereign base much of their life around.
There you have it … 10 benefits to owning gold as an investor. You’ll be hard pressed finding an elite investor that doesn’t have at least a portion of their portfolio dedicated to it (whether you know about it or not, that’s another story all together).
While gold builds a convincing case as an investment … it’s important to remember we follow the balanced (permanent) portfolio here at Global Wealth Club and while there’s many convincing reasons to own gold you shouldn’t invest more than you’re willing to lose.
How big that slice of the pie is, is only a question you can answer. However, studies have shown when participants have lost greater than 10% of their net worth from 1 investment, that impacts their psyche. Around 5% they found people could handle.
That’s just a guideline so your risk tolerance may be different. Anyways, thoughts to consider.
GWC Advice is Limited to Educational Advice.
The information provided by Global Wealth Club is provided for educational purposes only. It should not be relied upon as financial product, tax, asset protection or legal advice. None of the information provided by Global Wealth Club takes into account your personal objectives, financial situation or needs. You must make your own decision how to proceed.
If you want financial product advice that takes account of your particular objectives, financial situation or needs, please seek advice from an Australian Financial Services licensee before making any financial decision.
If you want tax, asset protection or legal advice that takes account of your particular objectives, financial situation or needs, please seek advice from a licensed professional in the area such as an accountant, lawyer or similar professional.