Investing In Gold In A Recession | Should You Buy? | How To Invest In Commodities
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Today I wanted to focus on commodities and specifically on gold. We’ve heard a lot about gold lately due to it’s strong performance in recent months. Year-to-date, gold is currently up over 15%. While stock markets have languished due to the pandemic crash in February and March, gold has proved to be a resilient asset in the face of a turbulent market. In this video, we will explore why that is, what the benefits and drawbacks on investing in gold are, the ways in which we as investors can add gold to our portfolios, and finally if gold still has some upside in the future for us to benefit from.
So let’s start off by exploring why people choose to invest in gold? Well simply put, gold has been viewed as a currency for as long as we know, even longer than the traditional fiat monetary system we follow now. The use of gold dates back over 5,000 years ago to the ancient Egyptians, where gold signified wealth and prestige. But it’s important to identify gold’s primary use as an investment. Where precious metals differ from other traditional investments is that these are non-productive assets. They don’t generate value for the investor throughout the time of ownership. Where a rental property will generate the investor income through tenancies, and stocks will pay out dividends to their shareholders, a kilo of gold will only still be a kilo of gold 50 years later. Throughout the time of owning the gold the investor hasn’t made any gains on their investment, except for the intrinsic value that the gold now holds, if it had gone up. So why do people elect to invest in gold?
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Disclaimer:
This video is for entertainment purposes and does not constitute personal financial advice on whether to buy or sell a specific financial security. Capital is at risk, investments may decrease in value as well as increase. You may not get back all the money invested. Investment objectives may differ, and therefore investment strategy must be factored in. If in doubt, seek advice from an investment adviser regulated by the Financial Conduct Authority (FCA).