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What is the outlook for gold as an investment 100 years from today?

By Finserv MARKETS - Aug 2,2019
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Introduction

Gold. This soft yellow metal is holding together the entire countries’ monetary systems. Gold has historically, culturally and financially been an important element. It has also been an investment vehicle for a long time now. But why do people invest in gold?

It pays off in the long-run

Here’s the thing: gold is a highly liquid asset, financially speaking. But it is scarce, which makes it a luxury good as much as it is an investment. Thus, it becomes a fundamental part of any investment portfolio, especially when it comes to diversification for mitigation of potential losses. Especially during turbulent times for the market, it serves as a hedge against inflation and currency risk. You’ll find that the strongest of currency has waned in comparison to the value of gold.

To sum it up,

  • Gold is one of the most effective diversification tools in an investment portfolio
  • Gold provides competitive returns compared to other major financial assets
  • Over time, currencies tend to fall in value against gold.

All of these features of gold as an investment vehicle point to one fact – that adding gold to your portfolio can boost risk-adjusted returns.

How has gold performed historically?

When evaluating the performance of gold as an investment over the long term, it really depends on the time period being analyzed. For example, over a 45-year period gold has outperformed stocks and bonds, while over a 30-year period, stocks and bonds have outperformed gold and over a 15-year period, gold has outperformed stocks and bonds.

To bring a different dimension to this narrative, if we see how gold fares in comparison to oil, gold has performed remarkably. The price of crude oil has fluctuated significantly – at one point dropping over 50% in 2015 – while the price of gold is down only marginally.

What will the investment outlook be in 100 years?

The future of investing in gold is bright. Parking your wealth in gold is a great approach to building wealth and protecting your savings. Even as economies and currencies continue on a downward spiral the price and value of gold will increase over time.

Thus, if you are considering investing in gold with a wealth-creation or financial growth perspective, then you should have long-term view because gold prices usually move in spurts. This means that when equity is doing well in the market, gold prices may not make it seem like this is an attractive proposition, but that is when you should bet on it when it is priced low.

And this trend – of looking at gold as a source of return – has been palpable through the years. Research from World Gold Council shows that investors rely on gold during periods of market uncertainty, when inflation rises or when the stock market tumbles. This pushes demand and prices in the short- and medium-term. In the long-run, however, gold is driven by positive income growth, which is great news in the light of an expanding global middle class with higher disposable incomes.

Overall, you can count on the performance of gold:

What is the outlook for gold as an investment 100 years from today?

Conclusion

Therefore, there is no gainsaying that gold has stood the test of time as a valid investment. Thus if you are planning to buy gold now, here’s another suggestion that’d save you both time and money: buy gold online. Purchasing digital gold eliminates many costs (making charges, sellers and storage fee) which you would have to pay if you choose to buy physical gold in the traditional way. At Finserv MARKETS you can invest in digital gold with just 2 quick steps. All you have to do is log in to the customer portal to purchase digital gold using your mobile number and other details. Just like any other online purchase, you would be asked to confirm the amount of digital gold in either grams or INR, and then redirected to the payment gateway. Even the process of selling and redeeming are just as seamless, with chatbot ‘yara’ always ready to assist you with any issues. There are other benefits to buying gold online: there is no cap on the amount of digital gold you can sell or gift, no need for documentation and an expedited process to get your gold delivered to your home.

“Finserv MARKETS, from the house of Bajaj Finserv, is an exclusive online supermarket for all your personal and financial needs. We understand that every individual is different and thus when you plan to achieve your life goals or shop for the gadget of your dreams, we believe in helping you Make it Happen in a few simple clicks. Simple and fast loan application processes, seamless, hassle-free claim-settlements, no cost EMIs, 4 hours product delivery and numerous other benefits. Loans, Insurance, Investment and an exclusive EMI store, all under one roof – anytime, anywhere”!

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