Advantages And Disadvantages Of Investing In Gold

Now that we have discussed why investment in gold is a good idea, let us take a quick look at its advantages and disadvantages.

 

Advantages

  1. Gold is an eternal metal – there is a strong demand for gold across the globe. 
  2. Gold is ideal for bringing diversity into a portfolio.
  3. Gold provides significant hedging opportunities against financial and economic risks. 
  4. Gold is a liquid investment – it can be bought and sold anytime you want. 

Disadvantages

  1. Buying physical gold brings in a problem of storage. One may incur additional costs storing the gold and keeping it safe.
  2. Gold prices can be volatile in the short run. 
  3. One may have to pay brokerage fees while purchasing gold ETFs and shares.
  4. It has been observed that when the stock market goes up, gold prices go down. Some investors panic when this happens. However, gold prices finally settle down.Hence being patient is important. 

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