Gold is a precious metal used in jewelry, technology, and manufacturing today, but financially, it is much more than that. It is valuable both in weight and as a different type of investment entirely which can diversify your portfolio, provide a hedge against inflation or market fluctuations, and protect your opulence. As you compare gold investment companies, understand that gold has been used universally throughout time by the wealthy as a means of securing their family’s generational affluence even despite changing market or societal conditions. This is because, while one may invest in a company and see their overall assets grow as the company’s value increases, gold has and always will be a valuable substance regardless of what market conditions seem to threaten the economy most at any given time.
Gold’s value stems not just from its perceived appraisal in jewelry, but also as a metal because it holds unique properties that make it essential for functions in infrastructure, manufacturing, military, and technology. Some examples of these properties that make it especially useful listed here are its pliability and the fact that it does not corrode or tarnish. For example, gold is required to make semiconductors, an electric component which is found in almost every piece of technology available to consumers, from cell phones to refrigerators to televisions. Gold must be used for semiconductors because other conductive materials such as silver and copper do not possess the same chemical properties as gold does.
Gold is also useful as a component of jewelry not just because it’s shiny and yellow—it is malleable, which means it can be manipulated easily and in thin structures, and it’s ductile, which means it can be rolled into extremely thin wires which other metals aren’t as capable of doing. Gold’s ductility is especially useful for jewelry—take a second to imagine just how thin certain pieces of metal need to be on a piece of jewelry like a chain or earring posts! Gold also can be used as a material to plate other pieces, which is cost-effective and can cheaply enhance the look and value of an item.
Why Invest in Gold?
Gold’s evergreen value to stable markets such as technology and manufacturing already make it a good investment, but it is also unique financially. Investing in gold and other precious metals such as silver works differently from investing in other assets.
Gold used to be used as currency in the United States through the Bretton Woods system as recently as 1971. This began with gold being used directly as a form of currency, but problems such as storage and consistency quickly became problems for world governments. However, the economy has shifted from the Bretton Woods system, which based the value of the US dollar on the value of gold, to using fiat money, which is money which individual countries set the value of based on national economic conditions.
The emergence of fiat money means that gold can now fluctuate in value much more independently of individual currencies. This means that it is also one more level removed from the effects of market crashes, recessions, and depressions. In fact, often gold’s value has the opposite effect during recessions—its value tends to increase. This was true during the 2007 financial crisis.
These properties mean that investments in gold are both well-insulated from economic turbulence and a good hedge against inflation, because even if the value of a fiat currency goes up due to inflation, the value of gold does not necessarily inflate with currencies or at the same rate. Additionally, gold is invaluable to unmoving areas of the economy because of its unique and inherently valuable chemical properties.
What do Gold Investment Companies Do?
The function of gold investment companies is simple—they are simply mechanisms for connecting investors to investment opportunities. To compare gold investment companies, one should be extremely careful in their research before choosing a gold investment company to work with, as they need to be trustworthy enough of your money. A good way of doing this is to compare the pros and cons of each company through lists like the one found at https://www.laweekly.com/best-gold-investment-companies-list-unveiled-for-2022/, because they clearly outline the benefits and risks of using each company. Another way to compare gold investment companies like this is to look at customer reviews to see what others have thought.
What Ways Can You Invest in Gold?
The praises to be sung for the practice of investing in gold are applicable to any gold investment, but the weights of each benefit may differ based on the exact way one is invested in gold. For example, one may choose to invest in solid gold, or gold bullion through some types of gold investment companies (bullion is a term applied to gold of a standardized purity) in the form of coins or bricks. One may also choose to invest in gold by investing in gold mining companies, believing that since the company is mining a resource which is expected to always be valuable, the company’s performance should also always be good. There are also gold refining and production companies which investors may choose to invest in for similar benefits.
There are also mutual or exchange-traded funds which reflect the value of gold, which is a way for investors to invest in solid gold without having to deal with securing, taking care of, insuring, and keeping track of physical gold itself. The mutual fund managers pool investors’ money to buy physical gold and keep track of it themselves, and then they divide the value of the gold they possess fairly back among their investors.
Finally, investors may also choose to invest in gold by pursuing gold options on one of these aforementioned gold mutual funds, which means that they enter a contract which the investor pays a premium for that grants them the right to buy or sell an asset—in this case, gold mutual fund shares—at an agreed-upon price for a certain amount of time. Doing this is an advanced strategy, and makes investing seem even more comparable to gambling, as the profit turned by this depends on whether the value of the asset goes up or down later.