Anyone seeking to grow their wealth is always on the hunt for the next best
asset to invest in in the past this asset has been a hot tech stock or a new
cryptocurrency but there is one asset that often gets overlooked especially by
beginner investors that can dramatically build your wealth over time and boss in
this video i will share with you the asset that when invested in will make
you rich and if you're new to the channel then hit the subscribe button
below for more life-changing content in today's day and age beginner and even
intermediate investors are always on the lookout for stocks that they can turn
for a quick profit we live in a world of instant gratification and the buy and
hold strategy has become an investing approach that many people typically
discount instead they narrow in on speculative stocks that they can flip in
the short term and achieve that investing high they desire one asset
that is generally overlooked due to its inability to offer these quick wins is
gold and in this video i want to give you a full guide on investing in
precious metals so that you can use it to grow your wealth and achieve
long-lasting financial success so first let's start with the history of
gold from an investment standpoint in 1934 the gold reserve act was enacted in
the united states and from this time until august 1971 the price of gold was
effectively set at 35 dollars per ounce luckily those who bought their gold in
the beginning of the gold trading have been able to ride this investment to
immense prosperity as of april 2020 the price of gold was sixteen hundred and
fifty dollars per ounce a price depreciation of approximately forty five
hundred percent since its inception however keep in mind that gold is
trading nowhere near its all-time high price of nearly two thousand dollars an
ounce that it reached in september of 2011. as you can see it paid handsomely
to robot gold back in the day and as it has become more actively traded the
opportunity to see triple digit or more returns has come to an end however that
doesn't mean you can't make a ton of money investing in this precious metal
in fact there are a ton of reasons to invest in gold the first is its
liquidity gold can be easily converted into cash anywhere in the world aside
from actual cash the liquidity and universality of gold is unparalleled
moreover gold is an asset that holds its value relatively well economists argue
that even the price of gold is not indicative of its value that is even if
the price decreases the underlying value of gold does not change much
this is largely because there is a fixed quantity of gold due to the fact that it
is a commodity whereas the us dollar which is a form of fiat currency holds
no inherent value next gold hedges against inflation gold
rises in value when inflation takes hold since gold is priced in u.s dollars any
deterioration in the dollar will logically lead to a higher price of gold
as a result during inflationary times gold offers a much more stable
investment than cash then there's diversification adding
different securities to your portfolio is an essential way to diversify and
lower the overall risk of your investments moreover because gold often
moves inversely to the stock market and currency values it provides an
especially effective way to diversify finally gold is a universally desired
asset given the benefits of owning gold that i just explained it's no wonder
that many people like having gold in its physical form or held through funds in
their investment portfolios not to mention gold has practical uses unlike
its investment counterparts you can't do much with a bond except for hold it but
gold is an input in tons of products it's used in jewelry and electronics and
this constant need for this resource further stabilizes the price of gold now
like any investment there are some downsides and i would be doing you a
disservice if i didn't highlight exactly what they are
first there is the fact that gold does not earn passive income other
investments such as stocks and bonds may derive a portion of their value from
passive income in the form of interest and dividends however the only return
you can make on gold is when the value increases and you decide to sell
second gold is susceptible to bubbles in turbulent economies many people start
investing in gold but when investors start to panic gold can become
overpriced this in turn means that your investment
could lose value once the price corrects itself
next is a practicality issue as i just said gold is used in many products
however until those products are created the raw inputs must be stored and
insured if you choose to buy actual physical gold you will not only need to
store it but you will need to insure it as well otherwise you won't be able to
replace it if it becomes damaged or stolen next are the taxes that gold is
subjected to capital gains taxes are higher on most gold investments since
gold is considered a collectible in the us the capital gains tax is 28
which is much higher than the ordinary capital gains rate of 15
finally increases in gold value coincide with local currency devaluation many
economists argue that gold only increases in value when the dollar is
devalued or inflation is strong as a result critics feel that gold doesn't
offer adequate returns in other markets as you can see there are strong
arguments for both buying and avoiding gold as an investment however like i
said no investment is perfect and i believe most types of investments have a
place in your portfolio it just depends how much and this takes us to the next
aspect of gold that you should consider which is how much of it you want in your
investment holdings now of course everyone has different investing needs
which means that there is no set rate that will of course work for everyone
which is why financial experts generally advise that you hold no more than 5 to
10 percent of your portfolio in gold you see if you are a younger investor you
have the ability to take more risks so gold might make up more of your overall
holdings on the contrary if you are nearing retirement then it is probably
better that you keep gold to a minimum and focus your money on less volatile
assets so let's say that you want to start adding gold to your portfolio how
do you go about doing just that generally there are four ways to start
investing in gold and they are the following method number one buying gold
directly you can buy gold directly in the form of bullion or coins you will
then hold on to physical quantities of gold which can be sold at a later date
it can feel good to have gold actual in your possession but you need to be
careful with it the biggest downside is that you will have to pay to have it
insured or stored method number two buying shares in a gold company another
way to get into gold is to purchase stock in a company that produces gold
the value of the stock is going to be strongly correlated with the value of
gold itself it may also be paid dividends on your shares which then
unlocks your ability to earn passive income through this precious metal
method number three buying futures and options you can invest in gold through
financial derivatives that specialize in gold investments like call and put
options a call is appropriate if you expect the value of gold to increase on
the other hand you'd purchase a put if you expect the price of gold to drop
like other derivatives gold options and futures are risky you have the potential
to earn high returns or incur huge losses
method number four investing in etfs a gold etf is an exchange traded fund that
specializes in investing in a range of gold securities such a diversification
can somewhat minimize your risk which i previously identified as being a
downside to investing in this type of asset now that you know how you can
invest in gold you probably want to know which method experience gold investors
tend to favor when it comes to owning this precious asset again this choice
comes down to investing preferences some investors like the comfort that comes
with owning a physical asset in the cases of bullion and coins however as
i've said you need to insure it and this will reduce your future profits those
who want to maximize their investing upside with gold will dabble in futures
and options however like i said this can be a risky endeavor
then there are those who want to make money with gold investing as easily as
possible and elect to own their gold through etfs which is a great strategy
for beginner investors at this point there's only one other question we must
answer when it comes to gold investing and it's when to buy
the best time to invest in gold is when inflation is expected to take cold and
force down the value of the national currency the earlier you can detect such
drops the more room you have to make a profit leading indicators such as a
stock market decline in a political turmoil may indicate a future
devaluation of your country's currency announcements by reserve banks to print
out more local currency can also indicate a good time to invest in gold
when the local currency is strong and inflation is not expected there is not
much room for the price of gold to rise with that said if there are expectations
of increased demands for markets that require gold such as jewelry and
electronics consider investing in gold to benefit from the potential price
pressure practically speaking however a buy and hold passive investing strategy
may be the best for ordinary gold investors since economies tend to be
cyclical buy when the price of gold is down whether or not your country is
going through turmoil or you think it's headed for some in this way you don't
have to worry about buying when everyone else is buying and driving up the price
at this point you should have a better understanding of how to invest in gold
than the average person however this is just one asset to comprehend amongst the
thousands of different investing options that presently exist
with each having the potential to exponentially increase your income quite
frankly you would be doing yourself a disservice if you stopped here with your
research into how to make money with these financial assets which is why i
want to share with you a course that i've consulted in the past to refresh
and improve my own investing comprehension the course is called
investing masterclass stock markets and index funds and you can join for free
today by signing up for a free two-month premium membership with skillshare after
you sign up using the link in the description below you'll have access to
this course and many more that will change how you see investing forever and
the best part is if you want to continue on it's just 15 a month which is peanuts
when you consider how much money this knowledge could make you so commit to
bettering your understanding of gold investments and the stock market in
general and sign up for skillshare today hey it looks like youtube thinks this
next video is the one that will change your financial life forever give it a
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