Guest post in our financial series. Enjoy! – Kimberly
If you are anything like me, watching your hard earned stocks drop all year has been a disheartening end to an already catastrophic pandemic. I started investing at the start of the virus as a way to protect some of the stimulus money I was receiving. During that time, it has been fun to watch the stocks drop and rise, never losing more than a few points here and there.
This year is a different story. As of last week the Dow was down .28%, bitcoin was down 7.99%, Nasdaq was down 3.86% and S&P 500 was down 1.27%. The crisis in Ukraine, mixed with high inflation and a still recovering world has caused the markets to be unpredictable at best, downright dangerous at worst. After watching my money wax and wane for two years, seeing it drop significantly in that short amount of time, made me realize I needed a change.
I am not a financially savvy individual, so when I make investments, I am diligent about how and what I am planning on investing in. I liked the thrill of the stock market, but it was time to find something with a little less risk. That’s when I decided to look into gold.
Why Gold?
Obviously, I am not selling the stocks I already have, that would be a loss of investment. But as tax season rolls around, I plan on taking that nice little return, and investing it in gold. Why gold, you may ask? Simple, as stated in that article, gold is safer. It doesn’t rise and fall with the markets. So, while I will keep my stocks and hope for a rise, it is time in my adult-life to diversify my portfolio and buy some gold as well. Gold started as the standard for our modern world. It was the way international exchanges were gauged, but recently, with set exchange rates, it is a separate commodity.
With its disconnect from the market, current events don’t have as much of a sway on the value of gold. No matter what new technologies, conflicts, and catastrophic events happen, the gold in your pocket should stay stable. In fact, as the economy wobbles, more people are drawn to investing in gold, causing the value to increase.
Where To Buy Gold?
I am a textbook researcher. As soon as I decided I needed a new investment, I jumped on the internet to find all the answers to my questions. Number one being: where to buy gold. Immediately I was overwhelmed by where and how and what gold to buy.
In my mind when I started this journey, I thought I would hand over my cash to some dusty, pirate-looking guy who would hand me bars of gold. I didn’t have a plan on what to do with those bars, but I was excited about the process.
During my research I realized it is a lot more than just bars of gold. Obviously, in my small studio apartment, I don’t have room for heavy bars of gold. I found some good Swiss America information. Trading that gave me a better idea of what I wanted and where to get it. That’s why I decided to invest in some small bullion coins that I could keep in a safe or safety deposit box. The size of the coins made it feel safer to store, and less likely to get stolen.
I also decided to try my hand at some fun rare coins. It was actually really fun to work with my agent, alongside doing my own research, to find the coolest, rare coins I could get my hands on. For an introduction into some fun coins to look for, you can check out this list here. Now, investing in rare coins doesn’t hold the same stability as gold bars or bullion coins, but it continues to give me a little bit of a thrill that I got in the stock market, without too much added stress. Plus, the coins are really cool to look at.
Risks of Investing in Gold?
There are always risks in investing. However, with gold, the risks are less severe. The main risk is that because its value is separated from the market, your reward will be lower. Plus, having a physical investment means you run the risk of theft or loss. Keeping all your investments in stocks is a lot less worry than having to store gold. It is always good to look at the pros and cons before making an investment of any kind.
Another con can be the fact that it is not providing an added income. Unlike other investment opportunities, you won’t be earning from the gold. It may appreciate, but that income is only available if you sell. There will be no dividends or earnings.
Gold is essentially a low risk, therefore a low reward. Which for me, in this climate, feels pretty good. It is easily obtained and has a history of always rising. There will be dips, of course, but watching those lows and highs might be a little less stressful than the stock market.
Having a physical item, versus a virtual one, makes sense to me with the economy where it is right now. The benefits greatly outweigh the risks, which helps my heart-rate return to normal for the first time in six months.
History of Gold
Humans have been obsessed with gold ever since we discovered it in the ground. For millennia, empires have measured their wealth in gold, and it has been a staple of physical currency since the concept of money was invented. However, gold’s value is more than just theoretical, it’s also used in the manufacturing of items we use every day, from electronics, to tools, to medical devices. Because of its vast uses, gold has always been well sought after. Its wide range of uses made it a valuable commodity since the beginning of its discovery, until now.
I found an interesting read on the history of gold as a currency, to help make my decision on investing. Before the second world war, gold was the standard for all exchanges, afterwards, a set fixed rate was used. After changing from gold to a fixed exchange rate, governments were able to stimulate their economies, causing the inflation of currencies. Since gold isn’t connected to the market, it remains a tad more stable as world economies crash and rise.
Conclusion
Investing in gold seems to be the safest bet for myself at the moment. Although it might not give me the high return that some of the other markets can, the stability it offers is an overall win to my mental health. The ability to provide a safe place for my hard-earned savings without dealing with the highs and lows of stocks, made this investment decision an easy one for me. It was also easy to find a reputable source to help me buy and sell the gold, in a way that made me feel comfortable about where my money was going. After all the research, buying gold was the best solution to my low-market stress.
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