Like gold, diamonds and some other rare resources are also good shields against inflation risks. However, people still choose gold.
Investor Warren Buffett – Berkshire Hathaway CEO explains that: A gold investor makes money when people become insecure, and it takes damage when the crowd is no longer concerned, and gold itself. does not add value.
Investors’ level of uncertainty in a crisis like Covid-19 is very high, as the pandemic not only affects global health but also causes an economic slowdown. Furthermore, we cannot be sure when the world will recover.
It is in such uncertain times that gold is seen as a safe haven for not only professional investors, but also those who often want to preserve wealth.
Compared to investing in equities, where even the largest blue-chip companies can fail, investing in gold seems to be, says Adam Vettese, market analyst at investment platform eToro. less risk.
As one of the world’s first monetary forms, gold’s physical properties have made it a reliable store of value. It has large enough reserves to trade but is completely in limited supply. Gold also doesn’t corrode, making it more durable than many other tangible assets.
Like gold, diamonds and some other rare resources are also not affected by inflation. However, people still choose gold. Because, selling diamonds is not as easy as selling gold. Usually, the diamond will be sold through auction, and that reduces the investor’s return.
However, Jackson reiterated Buffett’s view that the main reason people invest in gold is to protect wealth, since gold doesn’t generate dividends or interest, so you could lose money too. you fear (inflation, crisis …) won’t happen.
The point is at this point, when companies all over the world are facing uncertainty, you don’t want to risk equity risk. Buying the underlying asset will help you avoid that risk, Jackson said.