Monday, August 17, 2020

Gold investment risk - lower than many other investments

 

The precious metal gold is more popular than ever these days. A crisis in the stock market? Just invest in gold! Interest rates too low in the area of ​​fixed and overnight accounts? No problem, with gold bars or Munich you are currently earning significantly more money! At least that's how the presentations read, especially on the portals of many online retailers who concentrate on trading in precious metals. Investors have known that despite all the opportunities, there is definitely a risk associated with gold investments. Because there is not only the way up. Interim price adjustments can also reduce gold investors' profits. Or they lose some money every now and then because the demand for the precious metal drops for a short time.

Invest in time and cash in correctly?

Such situations are part of an investor's life. Interested parties will recognize that, although they need to know the risk of gold investments, they invest less riskily than most other asset classes. No investment is completely risk-free, and that applies not only to buy gold in its various forms, but also to the same extent for real estate, which analysts have repeatedly touted as a safe haven and a worthwhile way of retirement provision. The bottom line is that gold investments are characterized by a comparatively low risk. Fluctuations on the gold market are similar to those that investors are already familiar with in the stock market. The course line has been rising more or less steeply for about a decade.

Historical price developments also show losses

A look at the 1990s, on the other hand, shows that there is no guarantee of profit. Back then, some investors suffered painful losses. In any case, experts advise not to invest all of the savings in gold. As part of its own portfolio, the precious metal is indispensable for many investors - if only to protect against inflation and to hedge against any economic crises. A risk of gold investments is the influence of the economic situation. Only a high level of demand from industry and other branches allows the course to remain at a high level. In bad economic phases with low demand, the price will also decrease.

Compare fees before you start trading

The risk of gold investments in certificates on the precious metal is much higher. Since there is no protection from physical gold in this case, a high speculation risk must be attested. The same applies to the shares of gold mine operators. In general, however, investment professionals assign gold a lower risk than the majority of investment types. Investors generally need to know the buyers' and sales fees of the dealers and the storage costs, since the reserves of a certain size should rather be kept outside your own four walls.


Read Also: Invest in pure gold by buying an investment bar


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