Advantages vs Disadvantages in Gold Investment

Gold investment is not Suitable for Investors Who Want to Make a Profit in a Short Time

     Gold has been known as a profitable investment instrument, especially for the long term. Gold has two prices: the purchase price and the selling price, the value of which never becomes zero, being part of its appeal.

One of the benefits of gold is as a hedging tool. Even so, as with any other investment instrument, there are also drawbacks to investing in gold.

Advantages of Gold Investment

Gold Prices Tend To Rise

If you look at long-term investment, gold prices tend to be positive and continue to increase above the average inflation rate. So, it automatically makes the value of the money you invest in gold does not decrease in value.

Gold Value Resistant to Recession

Take as an example a comparison during the 2020 pandemic, the value of the Composite Stock Price Index (CSPI) fell sharply to reach 26.43%, in contrast to the value of gold in the same year is likely to rise.

Gold is Easy to Cash

Compared to the type of property investment which is relatively long in the process of selling it, gold is arguably very easy to cash out if you are in a condition where you have a need for fast funding.

Gold can be bought with a little money

There are 2 types of gold investment today:

1. Physical Gold

If you invest in physical gold, you can start with only a variety of denominations, starting from 0.5 grams. However, keep in mind, the smaller the denomination, the more expensive the base price is, because factories have the same production costs for packaging costs.

2. Digital Gold

Another type of physical gold is digital gold. The digital gold service even provides gold investments starting at as little as $5.

No Maintenance Fee

Apart from the tax that is charged when buying gold, gold investment does not have maintenance costs or other costs.

Disadvantages of Investing in Gold

High Spread Rate

This is the most prominent drawback of gold investing when compared to other types of investments. For example, if your gold investment is in physical form, then per gram of the spread value is an average of about 11%, in contrast to stock investments which have an average spread value of less than 1%, depending on the platform you use.

Risk of Losing

If we invest in physical gold, both bullion and jewelry, and keep it for ourselves, then there is a considerable risk of losing it. Especially if the gold you have is gold jewelry.

But don't worry, digital gold can answer these worries. Digital gold investment is safe and free from risk of theft, and of course also convenient, especially those registered and supervised by the Financial Services Authority

Slow Rising Prices

The disadvantage of the next gold investment is the price increase which tends to be slow. Gold prices have increased even when economic conditions are unstable.

When economic conditions are stable, gold prices also tend to be stable. But behind the slow increase in prices, gold actually offers certainty. In general, the trend of gold prices increases from year to year, even above the national average inflation, meaning that your investment value also increases.

Relatively Small Profit

Unlike other types of investment, gold investment does not provide great returns. Gold maintains value rather than adds to it. However, behind this, gold is a safe haven.

Safe haven is an investment instrument asset that is able to maintain its value, despite the unstable world economic conditions.

Minor Impact on Real Economy

Owning gold investment does not contribute positively to economic growth in real terms. Because the profits they have tend to be used for personal gain.

However, gold is very worthy to be reckoned with as one of the tools in investing, especially if you want a form of investment in the long term. The benefits of having a new gold investment will be felt in the next 5 to 10 years.