The precious metal gold has had an exciting history, beginning in 3500 BC, while worked and smelted by the Egyptians. The Chinese began using it as currency in 564 BC and it was later used by Ancient Greeks, Romans, and later by the Spanish – as well as a metal-based currency in early Great Britain.
By the 19th century, the world was operating on a Gold Standard that lasted until the 20th century. Although most worldwide currencies are no longer backed by gold, it is still quite important to the world economy. One reason for this is simply that gold has maintained its value since it began to be utilized as currency. The same thing cannot be said about paper currencies.
There are many advantages of investing in gold, and there are different ways to do so. Once you buy the gold, Alpen Partners can help you safely store it.
Why Invest in Gold?
Is gold a good investment for the future? Yes. In fact, it is the most popular of the precious metal investments. Gold has historically held its value, which can’t be said about all other forms of paper currency, coins, or other assets. If you want to keep your wealth from one generation to the next, choose gold.
One of the biggest uses for gold is for diversification. The trick to diversification is finding investments that are not correlated with one another. Historically, gold has always done the opposite of what stocks and other financial instruments have done. For example, the 1970s were not strong years for stocks, but gold was thriving. In the 1980s and 90s, stocks were up but gold was down. When the 2008 financial crash occurred, investors were leaving behind the dropping stock market and began buying gold again.
Investors still use gold to hedge their funds, as a safe haven and reducing volatility and risk. A hedge investment is one that can offset the losses in another asset class.
Investors will often buy gold to hedge against the decline of a currency, for it is a great defense against inflation. The price of gold tends to rise as the cost of living goes up. For over 50 years, investors have watched gold prices go up as the stock market crashes in times of high inflations. Research has found that gold is the best hedge against a stock market crash. Stockholders will often sell their stocks and buy gold.
Gold isn’t just used in times of financial uncertainty. It has proven to remain stable in times of geopolitical uncertainty as well. When world tensions occur, individuals flock to gold all over the world. During said times, gold outperforms other types of investments.
In terms of direct investment, many investors profited from the increase in the price of gold. Some still buy gold because they see it as a valuable substance that can be utilized industrially. For obvious reason, gold is held by many governments and wealthy individuals.
How to Invest in Gold
A long time ago, the only way to own gold was to own physical gold. Today, you can own gold in many different forms: gold coins, companies, ETFs, mutual funds, bullion, jewelry, and futures. Buying bullion and gold coins is the most direct way to the asset.
To buy physical gold, you can do it in different prices including coins, bars, and jewelry. These are easy to store in a bank or in your own home. Many recommend owning physical gold. It’s the only way to know that the gold is truly yours. Having a piece of paper saying that you own gold isn’t the same.
Purchasing gold funds is another way one can invest in gold. Gold ETFs, or exchange-traded funds, are a good way to have gold in your portfolio without having to store the physical gold. ETFs trade like stock. You can buy and sell them for a commission.
You can also invest in gold mining stocks that invest in the gold mining process. This kind of investment usually moves in the same direction as the price of gold.
Gold futures contracts are agreements to buy or sell quantities of gold at a specific price, place, and time. This protects you from some risks. Through gold futures, you can make (or lose) a lot of money when there are small shifts in the price of gold.
Where We Come In
Gold can be speculative. It has gone through, and will continue to go through, highs and lows. It can be a risky choice to put all of an investor’s money in. Like every investment, there are risks and rewards. Though gold can’t make any promises as a lone investment, investing in gold has been, and will remain, a solid choice in diversification of your portfolio – which should include other commodities like oil, real estate, and other hard assets.
Gold bars can be stored at one of our partner Swiss banks, either in the main vault of the bank or in a private safe deposit box. We also offer our clients the opportunity to store the precious metal bars in private vaults outside the banking system, either in a Freeport or at ultra-safe private vaults in Switzerland.
Swiss banks [link to Offshore Banking in Switzerland] have historically been some of the most trusted banks globally. The economy is so strong that there is no national deficit. The Swiss income exceeds its expenses, so the currency is fully backed by a self-reliant economy. The country also boasts low unemployment, high per capita income, and a popular banking destination utilized worldwide.
Alpen Partners has connections with some of the most prestigious banks in Switzerland that have trustworthy reputations for managing wealth and some holding your gold. Connect with us if you have any questions about gold as an investment or need a bank to hold your gold.