Debunking The Different Myths About Investing In Gold

Gold is fast becoming one of the most popular investments these days, mostly due to its inflation-resistant qualities. But even though a lot of people are interested in buying gold, there are an almost equal number of them who are strongly against the idea, and they are spreading misinformed myths and stories about the follies of placing your money in gold. In this article, you will be learning about some of those myths and you will also find out why they are not fact.

Myth No. 1 – The Price of Gold Is On The Decline

A lot of people believe that the rising prices of gold these days are due to an investment “bubble”; pretty much like what happened in the late 90s when a lot of people were so into trading tech stocks that their prices skyrocketed, but when the demand suddenly went down, and a lot of people lost their life savings in the process. People fear that gold is running the same course as the tech stocks, thus making people really afraid to invest in it.

The myth here is that gold is in a financial bubble. The truth of the matter is that for a financial bubble to exist, a huge majority of the population needs to invest in a single form of stock. According to research, less than 2% of people’s investments are in the form of gold, so you can hardly call that a bubble; in fact, how many people do you know even have gold in their investment portfolio? Not that many for sure. The truth is that the price of gold is forecast to only increase in the next few years.

There are some experts and analysts who believe that the price of gold is being artificially suppressed by Central Banks, the government. This is largely to protect value of a country’s currency. There is some good evidence to suggest that this is true and if it is, it does mean the gold is actually worth more than the current market price.

Myth No.2 – There Are Other Investments That Are Much Better Than Gold

This one is not entirely untrue, there are actually a lot of investments that can make you more money than gold; so if your purpose for investing your money is so you can make more, then gold is certainly not for you. But, most people are actually not buying gold to make a quick profit, they have more of a long term plan in mind, and that is to protect their assets from devaluation.

You may notice right now that your money does not have the same buying capacity as compared to a couple of years ago. The reason behind this phenomenon is inflation, or the devaluation of a nation’s currency because the amount of money in circulation is not backed up by a strong enough economy. In the US you can see the evidence that the economy is going the wrong way and that the national debt is only set to rise further, this is bad news for the dollar; but if you have physical gold, things would be a lot different. Gold is an internationally accepted form of currency, thus it is not affected by the performance of any one country’s economic strength; it will always have the same value wherever you are in the world.

These are just two of the biggest myths that you usually hear about investing in gold. And, because you can now conveniently buy gold from reputable online dealers, there is no reason for you to not invest some of your money in this precious metal.


Donna Morgan

Donna Morgan

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