Every individual desires to have financial security and this explains why people invest their funds in areas they consider viable. With a good investment, one is safe from any financial hardship that may strike at any point in life. If you are looking to invest, you will find that there are different investments to consider such as investing in gold or silver bullion, stocks, bonds, real estate among other options. However, one sector that has maintained its value over the years is gold investment.
For individuals, gold investment is a way to secure one’s wealth, save for retirement, or a method of storing money in a place without bank failures. Gold has a long history of maintaining its value more than paper currencies like the dollar or the euro. This feature has increased its demand over the years, thus leading so many people to ask the question: how much gold can you own legally? Of course, the answer to this question is simple – There is no limit to how much gold one can own.
However, the freedom to purchase this precious metal can be determined by the government of the country one is resident in. It is important that you check with local authorities to find what laws are applicable before making purchases.
Ways to Invest in Gold
The following are some ways to invest in this precious metal:
Physical Gold
This is also known as “bullion.” This is what comes to mind when you are considering precious metal investment – coins, bars, hunks of pure jewelry. Although it is the most exciting way to invest in precious metals, it is also difficult to buy, store, or even sell.
Note: While jewelry is known to accumulate value over time, the appraisal can be complicated and this can affect the price in the event that you want to sell. Sometimes, the resale value can go below what it was bought for.
Gold Stocks
These are stocks of publicly traded companies as well as exchange-traded funds (ETFs) that are focused on precious metals. Buying stock from gold-mining companies also comes with a risk but you have total control of the companies you choose to invest with. While buying stocks will not let you hold precious metals in your hand, it doesn’t stop you from selling your asset anytime you wish.
Futures
This is an agreement to sell or buy a specific amount of precious metals at a later date. The contract or agreement is what is traded on an exchange. This type of investment allows for more liquidity than physical precious metals and there are no management fees. To learn more about futures, you can read this article.
Note: Trading futures can be risky and inexperienced investors are advised to avoid it. This is because it requires a proper understanding of the market to succeed.
Why is Gold Valuable?
Looking for reasons why so much premium is placed on precious metal investment? Then you may need to check out the reasons below:
Historical Performance
Gold has maintained its value over time, unlike paper currency, coins, and other assets. This precious metal is seen as a method to pass on as well as preserve generational wealth. The unique properties of this precious metal have also been valuable to individuals and industries. Because it doesn’t corrode easily, it can be melted over a regular flame. Furthermore, you will find the color of this precious metal lovely and distinctive, unlike what you get with other elements.
Instability of the U.S Dollar
The U.S dollar is considered one of the most important currency reserves in the world. However, a fall in the value of the dollar leaves individuals and governments of different countries of the world turning to gold for security. This action has led to a significant increase in the price of gold due to its strength even in the face of a harsh economy.
The price of gold was at an all-time high between 1998 and 2008 and this can be linked with the decline of the U.S. dollar which was a result of several factors including a large national budget, increase in money supply, and trade deficits.
Hedge Against Inflation
Because gold’s price tends to rise when there is an increase in the cost of living, it has proven to be a good inflation hedge. This is because gold is seen as an excellent store of value and people may be motivated to purchase it if they perceive their local currency is losing value.
These are some important tips to note about investing in precious metals. If you need recommendations on other investment options, you can check here: https://www.investopedia.com/investing/alternative-investments-stock-market/
Conclusion
Gold is valuable because it holds its value better than paper currencies and this development has led to an increase in demand. If you are considering this investment, then rest assured that there is no limit to how much precious metal an individual can own.
