If you watch enough TV, you may have noticed a commercial telling you to buy gold. If you've considered buying gold, then you're not alone. Twelve percent of Americans own gold, which is a little less than 40 million people.
With so many people putting their money into gold, you may be wondering "why buy gold jewelry?" or "why buy gold bullion?" Well, there are many reasons, and if you read on you can discover five of the top reasons why people are putting their money into this precious metal.
Hedge Against Inflation
The first reason why you might buy gold is to hedge against inflation. This works because of the difference between gold and cash.
The value of cash drops slightly through inflation because financial institutions are always creating more and increasing the amount available. Gold, on the other hand, is a finite resource that doesn't drop in value the way that cash does since there is only so much in the world.
The theory is that a certain amount of money will lose value from inflation if left as is. However, that money can be used to buy gold now and then be sold for more in the future as inflation raises the cost of goods - like gold.
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Diversify Your Portfolio
The next answer to "why buy gold?" is to diversify your portfolio. This is a general rule not just for gold, but for financial management in general.
The idea is that if you invest your money in a lot of different places, then it will be more protected from a downturn in one industry. If all your money is in one company, one industry, or one valuable metal, then a downturn in one area could affect all your investments.
For example, if you put $10,000 into Pizza Hut stocks and then Pizza Hut declares bankruptcy, all of the money you invested will be gone.
If you had invested that $10,000 in Pizza Hut, gold, oil, Papa John's, and McDonald's, then most of your money will either be insulated from Pizza Hut's bankruptcy or your stocks in its competitors will become more valuable.
Provide a Safe Haven
Another reason to buy gold is that some believe that it can act as a safe haven for your money. This belief comes from the fact that gold prices don't seem to rise and fall with the stock market.
Because of this lack of correlation between gold prices and stock prices, gold can act as a safe investment when stocks are falling.
Keep in mind that just because stocks are going, that doesn't mean gold prices are going up. It's important to understand what is going on in the world of gold before moving your money. But most investors can agree that adding gold to your investment portfolio is a smart idea in a bear or bull market.
Build Electronics
Now we're getting into reasons why some may buy gold outside of the investment world. For electronic companies, gold is used to make their products.
Gold, like copper, is highly conductive. Because of this, it works great for moving electricity through devices like computers or televisions.
If you work with electronics or are trying to build your own, then getting your hands on some gold and other precious metals might be worthwhile.
Look Good
The last answer to the question "why buy gold?" is because it looks good and represents wealth. That's why so much jewelry both today and throughout history has used gold.
If you're thinking about increasing the amount of gold you can wear, consider things like watches, adjustable necklaces, and bracelets.
Why Buy Gold: Now You Know
So why buy gold right now? Growing your gold stash a great way to invest your money, plus it is great for building electronics and looking good. Get going growing your gold stockpile!
If any of these reasons speak to you, then get started buying gold. If you don't, someone else surely will buy the gold and drive up the price for other buyers. In these turbulent times, gold is a smart and stable choice for investors, collectors, preppers, manufacturers, and jewelers alike. Get gold!
