5 Reasons Why People Choose to Preserve their Wealth with Gold
1) Many people choose to preserve their wealth with gold for the simple peace of mind that gold has zero counter-party risk. Investors typically hold between 5% and 20% of their total portfolio in gold as means to balance the more riskier assets such as equities.
For example you have insurance for your house, car and even yourself why would you not insure your portfolio. Gold is not tied to the economy like many investments nor is it held in a bank and you don’t need to go through a third party to access your investment.
2. The benefits of holding gold to preserve your wealth are two fold, when the gold price is lower you will be enjoying a profitable yield from your other investments and in times of economic, political or even war when your stocks and bonds fail gold will perform very well, rising higher and higher as investors flock to put their money somewhere safe.
3. Gold does not owe its value to a country, company or government so its value can never be zero. Gold is also recognised as a global asset, a currency and more in some countries, this is why China have finally decided to open their Chinese Gold Market to the world.
4. Don’t be put off by the recent price drop when looking at gold’s performance since 2004 the price has soared by 185%!
5. Unlike investing in an ISA there is no limit to achieving the benefits of tax free investments. When investing in gold you are effectively already saving 20%, not to mention when investing in coins which are classed as British Legal Tender such as Sovereigns and Britannia s you can also avoid Capital Gains Tax.
Bonus Tip: If your near retirement age, gold can also be used in your pension. Self Invested Personal Pensions allow you to invest in gold and at the same time potentially qualify for 40% tax relief.