Stocks offer high returns and the potential for growth, while gold has traditionally been seen as a secure investment option. Which investment best meets your financial goals and risk profile depends on you personally.
Gold may not pay interest or dividends, but it remains an excellent choice for investors who prioritize wealth preservation and stability over the long-term. Discover your options by requesting a complimentary investor kit now!
Long-term returns
Gold has historically been seen as a safe investment during times of economic instability, due to its less sensitive currency movements than stocks and bonds that may impact returns.
Gold can act as a store of value, with its price remaining relatively steady over long periods of time. This makes it a valuable addition to retirement savings or estate plans for those worried about an economic downturn in the near future.
Gold hasn’t outshone stocks over time; in fact, stocks have returned an estimated three-to-one advantage versus gold over time. Still, many investors choose to include it due to its low correlation with other asset classes; including physical gold or investing through gold funds can help reduce portfolio volatility while helping protect long-term goals. Talk with one of Morgan Stanley’s financial advisors today about adding this diversifier!
Liquidity
Under extreme financial hardships, having access to assets that can quickly convert to cash is crucial. Gold is among the most liquid investments available; you can purchase or sell physical gold from any bullion dealer worldwide or invest in an ETF fund that tracks spot price of the metal while trading like any stock.
Gold has traditionally been considered an effective hedge against inflation because its purchasing power remains constant over time. This makes gold an effective long-term investment to protect yourself against price changes.
Gold can also serve as an effective hedge against government overreach. If your bank account is frozen or you fear intrusion by authorities into your affairs, gold provides an ideal means of protecting it outside the country in an external vault or safe. Gold investments also protect wealth against unexpected economic events; but before making your final decision to invest, be aware of all associated risks.
Taxes
Physical gold sales incur taxes at approximately 28% of the long-term capital gains rate in the U.S. To mitigate risks more efficiently, larger investors can purchase shares in gold mining companies through mutual funds or ETFs; unlike futures and options investments which depend on price fluctuations of gold for profits, this investment option does not depend on price changes but instead provides profits with reduced risk exposure.
Individual gold coins are more easily obtained and carry a numismatic value beyond their pure metal content, while bullion trading platforms may prove too complex for investors accustomed to online trading platforms and finding reliable dealers; mutual funds and ETFs offer new investors greater convenience; they’re easy to liquidate and can even be traded directly in brokerage accounts – providing an ideal alternative to stocks and bonds for new investors.
Risk
Gold has long been considered a safe haven investment during times of economic uncertainty, due to its relative stability compared to other markets and use for numerous applications. Gold also acts as a hedge against inflation – as inflation raises prices, purchasing power decreases; its finite resource status ensures its value increases during periods of high inflation.
Investing in gold can be done through physical bullion or equity products such as stocks or exchange-traded funds (ETFs). When purchasing physical gold, make sure it remains securely locked away and insured against loss. Before investing in any gold equities, it is crucial to research both the company and management team, as well as perform due diligence on salespeople using tools like National Futures Association BrokerCheck or an internet search.
Whatever type of gold investment you select, it is always advisable to create a well-diversified portfolio. Be mindful of any potential risks and be ready for an unpredictable market environment.
