Gold and shares are both attractive options for long-term investment. However, they offer very different things. While the rewards from shares can be big, they come with big risks. Gold is about long-term security and protection against uncertainty.
WHY INVEST IN GOLD?
- A proven asset in times of uncertainty
- Tax efficient depending on individual circumstances
- Physical, tangible asset
- Read more reasons to invest in gold
WHY INVEST IN SHARES?
- Invest in businesses that appeal to you
- Get to know both sides of risk and reward
- Can be an exciting and interesting world to get into
- Can provide annual income as well as long-term growth
INVESTING IN GOLD
Gold has been one of the best performing assets of the 21st century, rising over 650% since January 2000 Why?
Because it is a physical asset, gold is seen as safe and reliable, and something that will never go out of fashion. This has always meant that, when the markets seem uncertain, gold tends to do well. In addition to its history as a form of currency, gold is also in demand for decorative and industrial purposes, while its’ rarity guarantees stability even when the economy is in crisis.
There are a whole host of other benefits to gold investment, including tax advantages depending on individual circumstances, and the ability to sell your gold very quickly should you need to. Investments are always risky, but gold is seen as a safe-haven asset.
INVESTING IN SHARES
Investing in shares is never without risk, but the global pandemic was another stark reminder that market shocks can occur very unexpectedly. While the UK stock market has largely recovered the losses from 2020’s plunge, there is still some way to go, and the natural volatility will never disappear.
However, investing in shares can be rewarding, as you can invest in businesses that you are interested in, or passionate about. This could be a soft drink franchise, a green energy scheme or your local sports team. Hopefully the business will create products and services which will continue to be valuable far into the future.
Another aspect of investing in shares is that they provide dividends, money paid to investors from company profits. This means that investing in shares provides income, although this will be small compared to the amount you invest.
Prospective investors should be mindful, that shares come with a higher risk than some other forms of investment – get your calculations and estimations wrong, and you could wind up with nothing.
GOLD VS SHARES
If you are happy with risk, in a stable economy there might be a case for investing in shares over gold – especially if you already know what you’re doing.
But in the global economic fallout of the pandemic has made investing in shares even riskier, and investors would do well to account for this higher risk when considering their investment choice. Many people choose to diversify their portfolio, holding gold and shares as counterpoints to risk.
SAFE, EASY AND CONVENIENT
Managing stocks and shares can seem like a fun and engaging way to make your money work for you, but even if you know what you’re doing in the world of bull and bear markets, keeping abreast of all the latest developments can quickly turn into a full-time job.
Gold, on the other hand, is safe, easy and incredibly convenient, with tax advantages depending on individual circumstances and rapid liquidation opportunities, allowing those with their finger on the pulse to both shore up their finances and take profits as and when the possibilities arise.
Both gold and shares have their respective advantages and drawbacks, but in times like these when the economy, and the future, are uncertain, gold offers the less risky option and a safe-haven in unprecedented times.