Gold could be much more efficient than cash for storing wealth. Interest rates remain low, meaning your money in the bank “earns virtually nothing,” CNN Money reports. When you factor in inflation, that cash may have lost value. It is recognized that gold has a history of long-term stability.
Gold stocks are often more attractive to growth investors than to income investors. Gold stocks generally rise and fall with the price of gold, but there are well-managed mining companies that are profitable even when the price of gold falls. Increases in the price of gold often increase in gold stock prices. A relatively small increase in the price of gold can lead to significant gains in the best gold stocks and owners of gold shares generally get a much higher return on investment (ROI) than owners of physical gold.
When investors are ready to withdraw their investment, they should also consider the liquidation process. Clearance of physical gold and silver may require sending metals to an accredited dealer. If the dealer you bought from doesn't offer a rebuy program, you'll need to find another one to buy your metals. For various reasons, the yellow metal retains its intrinsic value better than anything else.
Cash and gold are important in the world of finance, but they have different applications. Cash is more liquid and can be used in more transactions, but gold is also rarer and has a long history of acceptance as a currency. Cash is better for short-term transactions because it's easier to move money. Gold is better for long-term investments because it has a more stable value.
Some people may say that cash is better because it is more convenient, while others may say that gold is the best option for long-term investments. Physical gold has maintained its purchasing power much better than cash, and with rising inflation, the disparity between gold and cash will increase. A company's ability to maintain healthy dividend payments is greatly improved if it has consistently low debt levels and strong cash flows, and the historical trend in the company's performance shows a steady improvement in debt and cash flow figures. Physical gold and silver are as liquid as cash in a bank account, but with steady increases in the price of gold driven by investment demand and scarcity, gold generates better income than bank savings.
The value of gold has always risen during political and economic uncertainty, riots, war, devaluations and more; as cash loses its value and banks go bankrupt, gold remains a valuable asset. Physical gold and silver are as liquid as cash in a bank account, but with steady increases in the price of gold driven by scarcity and investment demand, gold generates better revenues than bank investment. If you have cash and gold, you can use the cash to buy things you need right now and use your gold as an investment to buy things you need in the future. A long-term investment strategy (20 years or more) has room for cash, gold, and other financial securities, such as when you buy shares on an investment platform.