We are now drawing closer to the launch of The LuckScout Gold Program (learn more here). I’ve decided to write an article not only to share my excitement with you but also to provide some insights into the pros and cons of owning physical gold and the solutions we offer for the drawbacks.
Investing in physical 24-karat gold can be a valuable addition to a diversified investment portfolio. However, like any other investment, it comes with its own set of advantages and disadvantages, as well as dos and don’ts. Some individuals advocate for it, while others advise against it.
It’s a well-known fact that gold serves as a robust tool for preserving the value of your money. You might wonder why you shouldn’t achieve this with real estate. Indeed, real estate is also an effective way to safeguard your wealth. However, gold allows you to do this with relatively small amounts of money, whereas in the case of real estate, you often have to wait for an extended period to accumulate a substantial sum for down payments. During this waiting period, inflation can erode the value of your accumulated funds, and real estate prices typically continue to rise.
By investing in physical gold, you can preserve the value of every $100 of your money while you are earning more. However, achieving the same level of value preservation in real estate typically requires amassing at least thousands, if not hundreds of thousands of dollars.
As a result, physical gold presents a viable investment option for individuals from all walks of life, not just the rich, allowing them to grow their wealth over time.
Now, let’s delve into the pros and cons of investing in physical gold, not solely as a hobby or a desire to own this precious metal for its aesthetic appeal but as a business and investment opportunity for you and your family.
Advantages of Investing in Physical 24-Karat Gold
1. Tangible Asset
Gold is a tangible asset that can be held and stored physically, which can provide a sense of security to investors. Some people are even afraid of keeping their money in banks because they believe that banks might refuse to release their funds. This fear is growing, especially when there is increased discussion of economic crises that could potentially lead some banks to go bankrupt. Under such conditions, physical gold becomes a more popular choice and preference for many people.
2. Inflation Hedge
Gold is often considered a hedge against inflation because its value tends to rise when the purchasing power of fiat currencies declines: Fiat Money vs Assets Like Gold and the Pros and Cons
3. Diversification
Adding gold to your investment portfolio can help diversify your holdings, reducing overall risk. It allows you to avoid putting all your eggs in the basket of stocks, bonds, mutual funds, EFTs, and other investment instruments.
4. Long-Term Store of Value
Gold has been used as a store of value for centuries and tends to retain its value over the long term: Gold Revealed: Surprising Facts Few Know
5. Crisis Hedge
Gold is often sought after during times of economic uncertainty or geopolitical turmoil, which can lead to increased demand and higher prices.
Disadvantages of Investing in Physical 24-Karat Gold
1. Storage and Insurance Costs
“Storing physical gold can be expensive, and you may need to pay for secure storage and insurance to protect your investment.”
Solution: We provide this service for our gold customers who become our members after purchasing gold, and also for the members who buy gold, at no additional cost, if they choose to store their gold with us.
2. Illiquid Asset
“Buying and selling physical gold can be less liquid than other investments like stocks or bonds, which means it may take time to convert your gold into cash.”
Solution: Although this isn’t always the case, and it’s important to note that stocks and bonds can be riskier with the potential for substantial losses (compared to physical gold), we also offer a practical solution to address this concern: With our buy-back service, you can easily liquidate your gold whenever you wish.
3. No Income Generation
“Gold doesn’t generate income like stocks or bonds do through dividends or interest payments.”
Well, this is one of the disadvantages that some people use to argue against owning physical gold. However, it’s worth noting that those who make this argument may lack sufficient knowledge and experience in stock and bond investments. They may not realize that the number of people who suffer substantial losses in these markets is much higher than those who enjoy dividends and interest payments. Furthermore, they may not be aware that in order to receive a reasonable amount of dividends or interest, one must invest a substantial sum in these markets, which inherently increases the risk in these highly volatile and risky markets.
Therefore, when one takes a closer look at the facts and history, this disadvantage appears to be invalid.
4. Price Volatility
“While gold can act as a hedge against inflation and economic instability, its price can be highly volatile in the short term.”
Yes, this statement can be accurate, but anyone viewing the ownership of physical gold as a short-term investment is fundamentally mistaken. Attempting to buy physical gold now and sell it shortly thereafter is likely to result in a loss, as this approach is well-known to be impractical. In this article, I’ve elaborated on how physical gold has delivered a remarkable increase of over 560% in value over the past 30 years.
Another crucial point to consider is that the majority of gold investors are not primarily seeking profits. Instead, they aim to safeguard the value of their wealth accumulated over time.
Hence, this disadvantage loses its significance when one understands the purpose behind acquiring physical gold. Investing in physical gold is not akin to day-trading or scalping; it is a long-term investment.
5. Counterfeit Risk
“There’s a risk of purchasing counterfeit gold, especially if you’re not experienced in assessing its authenticity.”
Solution: At LuckScout, we offer a range of 24-karat gold bars and coins, as well as customized gold pieces crafted in various shapes and designs. Each of our 24-karat gold pieces is certified by us and comes with a certificate number that can be used to view, download, or print the certificate from our website. Additionally, purchasers will receive a hard copy of the certificate along with the piece they order. We take full responsibility for the quality and purity of our gold products and offer a guarantee.
6. Limited Divisibility
“Gold is not easily divisible, so it can be challenging to sell a portion of your gold holdings if needed.”
This limitation holds true primarily for those who purchase large 1,000-gram bars. Selling such a hefty gold bar immediately upon the decision to do so can indeed pose difficulties. However, it’s important to consider the practicality of this concern. How many individuals do you know who actually buy and hold such large gold bars?
Once again, those who mention the ‘limited divisibility’ of gold as a drawback may not fully grasp the variety of gold sizes available in the real world. Today, gold bars and coins are offered in sizes. This means that the so-called disadvantage becomes irrelevant when smaller denominations are taken into account.
What do you think?
Please post comments and share your thoughts. Thank you!👋🙂❤️🌺🌹
