Gold prices have fallen in recent times. A few friends were recently was in touch asking whether should they look into buying gold?
Gold basically has value but doesn’t generate returns unlike stocks (businesses) or properties. Asian countries like India & China do have a love affair with gold although this has been tapering off somewhat of late as well.
Some also view gold as a hedge against the USD or inflation. This view is mixed though & searching online you can find both sides of the argument towards making your own conclusion.
A Summary on gold:
- Speculative investment with long periods of stagnancy.
- Still commonly viewed as a buffer against downturns.
- Most significant con being gold does not generate returns unlike businesses, shares & properties.
- The amount of gold used for both decorative & industrial purposes is small compared to total output.
- Requires willing party to buy at higher price to realize any gains
In my opinion, you can consider buying gold as a form of savings (or anti-currency) but not as an investment. Suggested to keep 0 to max 5% of portfolio.
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