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Advantages and Disadvantages of Investing in Gold
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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
- Gold is an eternal metal – there is a strong demand for gold across the globe.
- Gold is ideal for bringing diversity into a portfolio.
- Gold provides significant hedging opportunities against financial and economic risks.
- Gold is a liquid investment – it can be bought and sold anytime you want.
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Disadvantages
- Buying physical gold brings in a problem of storage. One may incur additional costs storing the gold and keeping it safe.
- Gold prices can be volatile in the short run.
- One may have to pay brokerage fees while purchasing gold ETFs and shares.
- 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.
