Gold Investment

  Gold is a precious metal that is quite in demand by many people. How not? With an attractive shape, this one jewelry managed to attract the attention of many people because it is known as an investment item with the certainty that it will provide benefits for its owners.

Not surprisingly, because gold investment has a major advantage where the price trend is always rising from year to year. This clearly provides benefits for the owners, especially the difference in purchase price and selling price is quite large.

It is an open secret if the public makes gold as a form of investment to reap the results in the future. Various forms of gold are in high demand, such as the form of gold jewelry, gold dinar, in the form of bars, can also be gold savings whose function is for education funding, health costs, for the purposes of hajj, even buying a house.

Check out the following reviews about the advantages and disadvantages of gold investment that you need to know.

Advantages of Having a Gold Investment

1. Its Easy-to-Disburse Nature

Is the first profit that is quite tempting in investing, because other forms and types of investments have a tendency of properties that are more difficult to disburse or can only be claimed at certain times only.

Unlike the case with gold investments that provide flexibility for these investment holders to be able to cash it into cash in a relatively easy way and a relatively short time and more flexible than other types of investments.

2. Tax Free

It's different from owning shares in a particular company. The benefits obtained from a good investment in a company are not immediately enjoyed by the shareholders of the company.

The reason, getting this profit is sometimes also followed by taxes or sometimes the form of profit is not in the form of cash but additional company shares. Having gold as an investment item is the right choice if you want a tax-free investment.

3. Protecting the Value of Wealth

With the tendency of its value to increase from year to year, then gold is very suitable when referred to as the investment that is most able to protect the value of one's wealth. The protection of gold investments against one's wealth can be reflected in its ever-stable price and tends to increase, so that when resold, gold investment holders tend to get higher returns.

Another advantage of investing in gold is that you don't have to do it in bulk, like buying it in the form of jewelry. For sure this investment has a myriad of other advantages with lucrative profits. So do not be surprised if there are now many gold shops popping up to attract the interest of the public to those who live at the lower middle economic level, namely by selling the type of young gold that is quite affordable compared to old gold.

However, every type of investment is not perfect. Behind the more advantages and benefits that exist in gold investing, there are still some weaknesses that may be less or rarely known by many people. One of them is the risk of fraud under the guise of gold investments made by irresponsible parties who dare to give a big company name and provide vociferous promotions to attract the hearts of potential investors who are also actually potential victims of fraud.

Such a big case that is already quite known drags the name of the company Gold Bullion Indonesia (GBI), Virgin Gold Mining Corp. (VGMC), Gold Traders Indonesia Syariah (GTIS), and many more scams in gold investment under the guise of a bold online business promise huge profits, even much greater than the profits of gold investment by buying and storing it themselves.

Disadvantages of Gold Investment

1. High Risk of Loss 

This is the first risk that must be faced by gold investors, especially those who make gold in the form of jewelry that is used daily. This risk arises from robbery events that may occur especially when the jewelry used is quite numerous or flashy.

Gold investment in the form of bars with a considerable amount is also prone to this risk. So to protect their assets, gold investment holders are usually willing to pay more funds to rent a safe deposit box which is a facility of a bank to store files and customer property that is considered to have a high enough value.

With profits that are considered quite high, this investment is also not separated from risks that are not low as well. It is necessary to consider more about this investment if you are unsure of the surrounding environment that is a threat to your investment.

2. Fluctuating Price

Although the trend of gold prices is always increasing, but the increase does not necessarily happen every day and is not an event that takes a little time. It is said to have a tendency to increase the price of gold because the review is carried out within a few years.

Gold also sometimes decreases in selling prices although not infrequently increases. This frequent change in gold prices has the potential to make it difficult for gold investors to be able to calculate the value of gold investments that we have in the future.

Perhaps some investors will take the middle value of a fluctuation in the price of gold per gram to calculate the value of their investment in the future at a certain interest rate. This probably will not have much effect on investors with gold investments that are not too fantastic but will be quite a heavy consideration related to the volatile price for investors with the amount of gold investment that can be said to be a lot. So if you plan to have a large amount of gold investment, consider the fluctuation factor in the price of gold.

3. Very Small Impact on The Real Economy

Having gold investments cannot contribute positively to economic growth in real terms. This is because the profits tend to be used for the personal benefit of investors although some gold investors use these investment profits for spending needs where spending or consumption is also an indicator of economic growth.

Different things when investors have investments in the form of company shares. The profits obtained are at the root of the company's profits, which will be reused by the company as an investment again or used to finance the running of the company's wheels to be able to produce more and better products.

4. Is a Long-Term Investment

Clear. Gold investing is not a suitable alternative for investors who want a quick profit. Considerable fluctuations in the price of gold cannot guarantee investors will make big profits in a short period of time. As mentioned earlier that the tendency of gold prices to rise is a long process, meaning to benefit from the difference in buying prices and high selling prices can not be done in a short time.

Fluctuations in the price of gold are also heavily influenced by the factor of the national currency exchange rate against foreign currencies – which is now a hot conversation because it is alleged to match the 1998 event where US $ 1 is equivalent to Rp 17,000. Another cause is the financial condition of the people of a certain region, such as Indonesia.

When people are in good financial condition, other investments that promise higher returns in a shorter time such as company stock investments look more attractive and promising. In the end, gold investments began to be abandoned.

5. Prices Tend to Slow Down When Economic Conditions Stabilize

This is both a fact and an irony. Gold prices tend to increase when economic conditions are unstable. It could be that in this time there is inflation that causes an increase and also a decrease in the price of gold.

When inflation occurs much higher than people estimate, it does not rule out the possibility that the price of gold will be much higher. And vice versa. Stable economic conditions will encourage people to consume properly. In the event of unstable economic conditions, gold is used as the safest alternative to securing investor wealth.

Anticipated Losses That Arise

Learning more about what are the weaknesses of the investment that you will choose, will prevent you from losses that may arise due to mismanagement of investment funds. By knowing what advantages and weaknesses will be caused, it can help you anticipate the possibility of losses incurred. Interested in investing in gold?