Investing in Gold
The smart investor has always considered gold to be an integral part of a well-balanced portfolio. This is because of it’s role as a diversifier, due to it’s low correlation to most other asset classes. Gold is the ultimate wealth preservation tool; considered not only a hedge against inflation but it also acts as a currency hedge, in particular against the dollar. As a strategic asset, gold has historically improved the risk-adjusted returns of portfolios, providing returns while reducing losses and providing liquidity to meet liabilities in times of market stress.
Gold is not only useful in periods of higher uncertainty. It’s price has increased by 10% per year on average since 1971, which is when gold began to trade freely following the collapse of Bretton Woods.
Whether you’re considering your very first gold investment or are a long-standing investor, we’re committed to providing information and advice to our customers to ensure they’re making the right purchase to suit their budgets and portfolios.
Why invest in gold?
Gold is a highly liquid yet scarce asset, and it is no one’s liability. According to the World Gold Council, investment demand for gold has grown 18% per annum, on average globally. This rapid growth has been driven by the expansion of the middle class in Asia, exchange traded funds (ETFs) and more focus on risk management following the 2008-2009 financial crisis in the US and Europe.
As mentioned above, owning gold bullion could prove extremely lucrative in periods of economic uncertainty. In recent years traditional banking formats have been shunned by investors due to scepticism of the system and the way their money is handled. People are increasingly concerned about holding large deposits with their banks and so turn to a liquid asset with no credit risk that has outperformed fiat currencies.
Effective risk management to achieve a balanced portfolio requires diversification. Investors are attracted to gold due to its low correlation to other mainstream assets and as a hedge against systemic risk and stock market corrections.
In physical form it is also the most liquid asset devoid of financial-market counterparty risk. No other non-financial asset, including real estate, fine art, or commodities, measures up as a potentially effective or accessible hedge against a market meltdown.
Rapidly expanding sovereign debt in the US and the rest of the world is a time bomb. Rising interest rates and market stability have rarely, if ever, coexisted, even if those increases are generally anticipated. Exposure to gold represents a compelling investment proposition, if only as a hedge against increasing macro and market risks.
Where can I buy gold?
Deciding to invest in gold is not a simple decision. Yes, gold bullion does protect you from economic uncertainty, but ultimately it is still an investment, so you should always ask yourself, ‘Should I buy gold or is there another investment that would be better suited to my goals?’
As with any investment research is key.
When you buy gold online, it’s important to choose a reputable bullion dealer. Once you’ve narrowed a few options, delve into each one. Look for reviews, the experiences of other customers and impartial industry opinion – it won’t take long to get a feel for a company after partaking in this research.
At Sharps Pixley, London’s leading bullion broker, we emphasise a discreet knowledge-based approach to gold investment. We understand the importance of client relationships and you can be assured you will receive the same level of client service that has made us a popular choice among the most discerning gold investors.
Where should I store my gold?
Physical ownership of your gold is one of the biggest advantages of investing in gold bars and coins; however storage should be one of your biggest considerations. There is no one size fits all approach though.
Basically, there are four storage options available to you: safe deposit boxes, bank storage, home storage or creative storage. Although we provide a safe and secure safe storage option here at Sharps Pixley, there are pros and cons for each option, so you should be clear on how you intend to store your investment from the beginning.
How can I buy gold?
Buying gold online with Sharps Pixley couldn’t be simpler. We run a quick, simple and secure online bullion store that is founded on the now considered old-fashioned values of trust and communication.
We’re committed to ensuring that all of our customers invest in the right options at the right time to ensure their investment targets are a realistic proposition. Our website also allows you to track the state of the market, which gives our customers the knowledge they need to buy and sell at the best moment.
Of course, we know that such an investment is a big decision and sometimes talking face-to-face with a trustworthy individual makes things much more comfortable. So, why not pop into our London, St. James’ street showroom to take advantage of our knowledge and take a look at our vast range of products in person?