Digital gold can be your best investment option in unstable situations. when the world is facing a global economic crisis. Read the article to know why.
The COVID19 Pandemic has proved that the global economic stability of the market is unforeseen and unpredictable.
Thus when it comes to investing money, investors of every generation are on the lookout for a cushion for their portfolio, an asset that is not much affected by the ups and downs of the market.
Well, gold has proven itself in terms of volatility and constant good returns. Be it digital or physical, both types of gold investments are considered safer options for investing money.
Digital gold particularly is a more convenient and affordable investment option, and thus it is extremely popular among youngsters.
Gold as a Hedge Against Inflation
Gold is historically known to perform well during inflationary periods. This happens because gold, unlike the currency of a nation, has an intrinsic value attached to it.
This is why it is used as a store of value for many currencies including the US Dollar. An increase in inflation can downgrade the value of a dollar or a rupee, but gold is unaffected by the waves of inflation and performs well even during that wave.
It is important to note that the value of gold is inversely proportional to the value of a dollar. Life and business have been significantly impacted by the COVID-19 pandemic.
Financial experts were not surprised by one thing, though: despite the global economic unpredictability, gold prices have seen a sharp rise. It is therefore the ideal hedge against inflation.
The History of Gold Prices
If you look at the graph of the prices of gold, you will notice that in the years 2000, 2008 and 2020, the prices skyrocketed. These years specifically were the years when the world was facing a global economic crisis.
All other forms of investments including the stock market and mutual funds completely crashed, but the prices of gold increased instead.
Gold mining is almost stopped in all parts of the world, hence the prices now depend majorly on the demand and supply of the commodity. In the last 50 years, gold has given a constant return of around 8% to 10% to investors.
As a result of the resurgence in interest in gold, investors, particularly millennials are reviewing their investment portfolios and learning more about Digital Gold and its advantages. Digital gold investments provide transparency in trading and are a secure choice for novice investors.
In short, digital gold provides all the benefits of investing in gold, but without the hassle of carrying it around. You can invest any amount you want with complete flexibility thanks to digital gold providers!
A good portfolio consists of both risky and safe investments. While most investments in stock and equity are risky due to the volatility of the market, you need an asset to balance out the risks.
Gold can be a perfect solution for balancing out your portfolio. The returns may not be very high but they are consistent every year. So even if the world is facing an economic crisis, gold can save your portfolio from crashing. Building wealth and protecting it, both are your responsibility.
And Digital gold can provide you with both, good returns and protection against the unpredictability of the market. Now that you understand how gold can be your saviour from the economic crisis, let us understand why you should consider buying digital gold over physical gold.
Digital Gold vs Physical Gold
Though the returns on both types of gold investments are pretty similar, digital gold in particular has become the favorite investment option for GenZ and Millenials.
Possessing actual gold in your hands is a huge challenge and technology has made it a lot easier and safer through digital gold. Here's how digital gold is a more convenient option than physical gold.
Convenience in Buying and Reselling
You can easily buy and sell digital gold with an app installed on your smartphone. You can do it in just a few clicks, which saves you time and energy.
Storing physical gold is the biggest challenge, you are always in danger of theft and robberies. But digital gold is kept safe inside your digital wallet, which is completely inaccessible to robbers.
Guarantee of Purity
There can be a high chance of impurities being mixed in physical gold. But digital gold is always 100% pure.
The fractional investing strategy used by Digital Gold enables younger investors to choose a low-risk, low-cost investment that best meets their long-term objectives.
However, in India, physical gold is also considered auspicious and holds a place in all the festivals that we celebrate. You can consider buying physical gold if that is your purpose, but purely from an investment point of view, digital gold is a lot more convenient option than physical gold.
How Safe is it?
Digital gold investments are completely secured with the help of technology. However, you should be extremely careful while choosing the app or digital wallet for doing the same. you should only consider buying digital gold where you can keep your 100% trust on.
Jar app can help you with your first digital gold investment and also help you to automate your saving habit. Download Jar app today!