Below I have listed some questions that may have remained unanswered throughout this article.
If after the end of this article you still have any questions, leave a comment to make this article even more complete.
How To Identify Good Buying Times For Gold?
This is the question that we all want a ready-made answer with several investment tips .
Although It Is Impossible To Predict The Future, Good Times To Buy Gold Would Be:
- high inflation
- Rise in the Dollar Price
- low interest rates
- Financial Crises
Is Gold Investment Or Capital Protection?
We can say that it fulfills both functions well, given due attention to both functions.
From an investment technical point of view, it offers a low correlation with other assets and a high (historical) return. Since 1999, Gold has yielded 1,050% or an annual return of 21.52% .
Therefore, any portfolio that has had gold in its allocation since 1999 has improved its risk-return ratio .
In addition to the good historical return, Gold is an essential investment in financial crises, guaranteeing excellent protection for the investor.
In these periods of crisis, assets such as stocks, real estate funds and long-term fixed-rate and IPCA-indexed securities tend to lose value.
There are few assets that gain value in these periods and Gold is one of the best, along with the Dollar.
Invest In Gold In Cash Or Gold In Certificate?
Some more conservative and concerned readers probably prefer Gold in cash and kept with them to avoid government confiscation and serve as currency in extreme situations.
Certified gold, on the other hand, offers more practicality to buy and sell, in addition to less bureaucracy and a safe place for custody.
This answer depends on the investor’s preferences. Personally, I prefer Gold in certificates, for its practicality in relation to Gold in cash.
I prefer a certificate that my Gold is stored in the bank than having my own gold stored at home.
What Are The Risks Related To Gold?
The main risk for those who want to buy Gold certificates is their price devaluation on the Stock Exchange.
For Those Who Wish To Have Physical Gold At Home, The Main Risks Are:
- Not having a safe place to keep the Gold and increase the chances of it being stolen.
- Extra need to evaluate the quality of the Gold, to verify if it is really 24k (99.9% pure).
- Lack of liquidity at the time of sale.
What Is The Proper Allocation Of Gold In An Investment Portfolio?
Despite all the attractiveness of investing in Gold and its excellent profitability over the last 14 years, it is not recommended that investors have more than 20% of their allocation in Gold.
The ideal is for investors to seek a wide diversification of their portfolio and asset allocation , never placing a large part of their capit al in a single investment class.
Generally Speaking, Investment In Gold Could Be Allocated As Follows:
- Optimistic Economic Scenario : 5%
- Neutral Economic Scenario : 10%
- Pessimistic Economic Scenario : 20%
This is just one example, and the optimal allocation will vary from investor to investor.