Gold and equities
Shares might seem like an attractive proposition for investors, but with big rewards come big risks. As a longer-term investment opportunity, gold offers greater security and much more solid protection of wealth.
With a changeable and volatile world economy, investing in shares is becoming increasingly risky and is tipping the balance between risk and reward towards uncertain outcomes. Even the smallest return is not guaranteed, but with gold, financial protection against this uncertainty has been proven over the years.
There are countless examples of markets plummeting as a result of political and economic events, with 2019 proving particularly turbulent thanks to a US-China trade war, Brexit, stagnant EU economies and falling productivity worldwide. Financial policy makers are mulling policy changes and the threat of recession is ever-present. All of this is felt in market conditions and value. Gold by comparison offers investors the opportunity to grow their portfolio with much lower risk.
Shares versus gold
Reliability, risk and reward
When all other asset types struggle due to an uncertain market, gold rallies making it a safe and reliable haven for investors, especially those with a lower appetite for risk.
Shares, on the other hand, are very much at the mercy of fluctuating markets and demand plenty of skill and luck in order to reap big rewards due to the inherent complexity of this asset class.
Investing in shares can be exciting, but many investment decisions of this type are based on speculation and on the hope that the company you invest in will remain profitable to enjoy the rewards. It is a far riskier investment opportunity than that offered by gold.
With factors outside of the control of investors or financial institutions making shares vulnerable to a wide range of potential threats, invest in the wrong shares at the wrong time, and you could be left with nothing.
Although many people invest in shares in order to provide them with an additional income, unless you are willing to put in a significant investment at the start, it is unlikely that any dividends will finance a luxury lifestyle in the near future. Even a significant investment may not be enough – what is certain is that the stakes are higher and capacity for losses much greater.
However, as gold is in such high demand the world over and is easy to liquidate, investing in this precious metal can help provide additional funds for life-changing events due to its flexibility.
Investing in gold coins can offer greater flexibility and easier liquidation for smaller or more specific amounts, so this can help boost income whenever you feel the need arise.
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