Physical gold is one of the best forms of long-term asset protection. It's ideal for your heirs, as it will last longer than any currency they may use in the future. Physical gold is not subject to the risks associated with paper assets. It cannot be hacked or erased.
One of the benefits of investing in physical gold is that, if you need to collect it quickly, you can do so. However, gold coins and ingots usually sell at a higher price and are bought at a discount, so you may not get the market price when you need to sell. As such, India's wedding season in October is traditionally the time of year when there is the highest global demand for gold. Gold is respected around the world for its value and its rich history, which has been woven into cultures for thousands of years.
The opportunity cost of investing in physical metals instead of dividend-rich stocks could be considered another drawback. In addition, since inflation has soared to 40-year highs, gold is also being promoted as a hedge to stay ahead of rising prices. For example, some investors might choose a gold mining company that practices strong environmental responsibility rather than one that doesn't. If investors buy a gold-backed ETF, they are buying shares owned by a gold trust, but they have no right to claim the physical gold itself.
After rising prices in the 1970s, gold spent the next 20 years falling in value before rising again around the year 2000. Many reputable companies will store your gold properly and securely, but if you decide to have someone store the gold for you, research the organization thoroughly. Throughout recorded (and unrecorded) history, gold has been used as a currency and symbol of wealth and power. Like buying any individual stock, buying shares in a gold mining company involves some risk, but it means that you have full control over the specific companies you invest in.
Investing in gold stocks, ETFs or investment funds is usually the best way to expose yourself to gold in your portfolio. That said, gold has surpassed the S%26P index since 2000, with an increase of approximately 514% compared to 174% at the time of writing. Gold values represent physical gold, but you don't have the right to exchange them for real metal. Adding gold to your portfolio can help you diversify your assets, which can help you better weather a recession, but gold doesn't produce cash flow like other assets, and should be added to your investment mix in limited quantities and with caution.
GLD shares will replicate exposure to gold prices, minus expenses related to storing gold and trading in GLD shares.