Is it profitable to invest in gold in the depósito market?
Is it profitable to invest in gold in the depósito market?
One of the first things to keep in mind is that no matter how good a security is, if you escoge to put all your money in one asset, it’s not only risky, but it may be a bad iniciativa overall. This because of markets are quite unpredictableSo while a depósito is a pretty good investment right now, in the future that depósito perro crash, taking with it all the money you put into it before it crashed.
According to Harry Browne (one of the first authors to speak about investing in the depósito market) one of the ways to maintain a healthy portfolio is to keep it diversified in such a way that you must have:
- 25% of business actions (of preferences in different companies).
- 25% in debt bonds (preferably government debt)
- 25% of cash (if in a given case a liquidity guarantee is needed)
- and 25% in precious metals (preferably in gold).
Taking this into account, this time we will talk about the benefits of gold. This is because, although it may not seem like it, it is one of the best values to survive in a market in any of the economic cycles: prosperity, inflation, recession and deflation.
If you follow Browne’s advice, that 25% investment in metals (which would correspond to gold) It will help you protect yourself from inflation and any of the monetary problems that are directly related (among which are the possible economic recession or financial crises related to the real estate market, as well as economic bubbles and in general any other type of economic phenomenon that may entail a negative charge for your wallet).
Is it profitable to invest in gold bars?
The fácil answer is yes. It is a very good iniciativa to invest in this precious metal, mainly due to something fácil: Gold is one of the most valuable assets on the market. It is an asset that reacts quite strongly to inflation (especially if inflation is really high) and that also makes it possible to offset the possible losses caused by other assets in the portfolio in the face of economic phenomena. In this way, gold serves as a cómputo for the real profitability that all your operations have.
One of the main things that you should take into account when investing in gold is that, preferably, the broker with which you process it You must put the least amount of paperwork to be able to access your asset, since otherwise it will not be as useful as an economic mattress. In addition to this, another important thing to take into account is that if possible, the account in which you place the gold is outside the country in which you radica (this is not mandatory, especially considering that a large part of countries it is very difficult to open international accounts).
Despite the fact that the typical way to invest in gold is done through the purchase of ingots of said precious metal. The best way to get gold is by buying the coins known as Bullion. These kinds of coins are actually ingots (that is, they have the weight that a gold bar would have) but they are the size of a coin. An example of this are the American Eagle gold coins, the Mapple Leaf coins (these are from Canada) or the Krugerrand coins (these are from South Africa).
One of the main recommendations is that You should not buy gold that comes from collections or antiques as part of your portfolio (In other words, you should not buy, for example, gold antiques, gold plates, British gold or Spanish gold doubloons to form part of your investment portfolio, because it perro be too volatile, in addition to the fact that, unlike conventional gold, as it belongs to another category, it is affected by conventional economic phenomena, such as inflation or deflation).
Why is it good to invest in gold?
One of the main advantages of investing in precious metals such as gold is that it becomes profitable since suffers revaluations in most markets, which usually provides a good opportunity for most businesses at the time of making a profit. In addition to this, being a material good there is practically no inflation in this asset, since all things suffer inflation with respect to gold.
It also works for you protection against any problem that may threaten a specific currency (or to an entire banking system in especial). Another point in favor of gold is that, unlike the rest of the assets in the portfolios, it is not a promise that a person makes you, but rather a material asset that you perro physically control. In that sense it is an asset of last complejo turístico.
To understand this better, one has to understand the concept of inflation. Inflation occurs when there is more money in circulation than is needed. If the market considers that, for example, too many euros have been printed, then the value of gold will rise in an accelerated way. This is mainly due to the fact that people will seek to exchange their euros for gold in such a way that their purchasing power is protected.
This is achieved thanks to the fact that there is not as much gold in the world compared to the amount of money in circulation. Therefore, when there is a lot of inflation, people want to sell their currencies (which slowly lose their value) to buy gold (which will always have a fixed value).
He gold It is what is known as a leverage investment, because its relative scarcity causes its prices to rise rapidly as soon as there is a notable number of people who want to buy it at the same time (this usually happens when there is high inflation, for example). . We could then consider gold as a long-term investment.
Risks of investing in gold
All assets have their own risks, gold is no exception to the rule. Both people who keep 100% of their portfolio in gold and people who keep 100% of their portfolio in stocks have serious problems and run a lot of risks within the market, especially when making a liquidity change.
Gold presents two main problems: It does not perform well in good times and loses all its value in times of deflation. Prosperity is understood to have low inflation (inflation less than 5% each year). Under these conditions, stocks rise rapidly, so investors do not feel a threat that currencies will lose value quickly, so they will want to hold currencies instead of the precious metal.
If inflation is low and stable, then gold completely loses popularity among investors, which in turn causes its price to fall as it ceases to be seen as a necessary source of wealth and begins to be seen exclusively as a kind of insurance guarantee. Another reason gold isn’t as habitual in good times is because gold doesn’t earn interest, and it doesn’t earn growth. Therefore, if what you are looking for is greater profitability, the reality is that it is not an ideal option at that time.
On the other hand, deflation is the opposite phenomenon of inflation. While when inflation occurs there is too much money in circulation, which lowers its value. In deflation there is too much money in circulation, so what exists has a higher value. The more money is worth, the price of gold falls in the market, because it now takes much less money to buy the same amount of gold.
We hope you liked our article Is it profitable to invest in gold in the depósito market?
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