Why Buying Gold and Silver is a Smart Investment in Today’s Economy
A volatile market, inflation, and currency devaluation pose threats to the wealth of many investors in today’s uncertain economic climate. Gold and silver have been timeless investments.
Ancient civilizations used gold and silver as stores of value. Enduring appeal lies in their scarcity, durability, portability, divisibility and universal acceptance as a medium of exchange. Here are some reasons why buying gold and silver be a smart investment in today’s economy:
- Protection against inflation
- Threats to your purchasing power is inflation the rate at which prices rise over time. Less money to spend when prices increase while income is steady or decreases.
- Gold and silver are often considered “inflation hedges” because they tend to hold their value or appreciate during times of high inflation. Because they cannot be created out of thin air like fiat currencies and printed by central banks at will.
- The durable nature of gold has made it the best performing asset class historically. For example, if you had bought an ounce of gold for $35 in 1971 (when President Nixon ended the convertibility between dollars and gold), it would be worth around $1800 today an increase of more than 5000%.
- Diversification- Investing in precious metals is diversification spreading your portfolio across different asset classes to reduce risk. To buy gold and silver in Phoenix low correlation with other assets like stocks or bonds. Adding them into a portfolio could help stabilize returns when other investments may experience volatility.
Diversification also helps protect against systemic risks that affect all assets simultaneously such as geopolitical events or natural disasters since they don’t rely on economic activities directly tied to national borders but rather through global demand factors instead.
- Safe Haven Asset- During times when confidence in governments or financial institutions wanes due to political instability events losing faith in paper currencies debt defaults collapse market crashes etc. People tend to flock toward safe haven assets like precious metals since they retain their intrinsic values even during crisis periods where everything else falls apart quickly overnight without warning signs beforehand.
- Long-Term Store of Value – For those who believe that paper currencies are becoming increasingly vulnerable due to unsustainable levels of government debts printing large amounts of the new money supply without backing tangible assets nor having enough reserves to guarantee stability in worldwide economies to owning physical bullion could offer peace of mind knowing there’s something tangible holding onto outside traditional banking system channels & digital platforms that could easily be hacked by cybercriminals.