Gold price: the misconceptions about investing in the precious metal
It’s difficult to look after, doesn’t generate an income, and it’s risky. These are three of the often-quoted reasons gold is not used as part of a portfolio.
Simon Popple from Brookville Capital talks about these points and concedes there may be downside to the current price of the precious metal, but as the price drops, production capacity is taken out of the market which then has a supportive effect.
If, as he believes, there is downside to come to the markets then gold may be the solution.
Simon invites you to download his report on the topic here.
(Video summary)
The truth about investing in gold
In this video, Simon Popper from Brookville Capital talks about some misconceptions surrounding investing in gold. He explains that it can be beneficial to have a small amount of gold in your investment portfolio as a way to protect yourself against potential market panics.
Popper mentions that while gold doesn't generate income on its own, you can invest in gold companies that pay dividends and have the potential for capital gains.
Popper also addresses the belief that gold is a risky investment. He points out that historically, gold has performed well against various currencies and has limited downside risk because of production costs.
He also talks about the different ways you can invest in gold, such as buying physical gold, investing in paper gold, or purchasing gold sovereigns.
The long-term investing game
When it comes to timing the market, Popper suggests that investors focus on being in the market for the long term instead of trying to predict the perfect time to buy gold. He advises allocating your money over a period of time to average the cost and minimise potential price fluctuations.
Popper also talks about the relationship between gold prices and debt. He explains that as debt continues to increase, it could drive the price of gold higher. While gold may not be a perfect hedge against inflation, he notes that it has historically maintained purchasing power and can be a useful tool in combating inflation.
Popper encourages viewers to consider adding gold to their portfolios, even if it's just a small percentage, and suggests that now is a good time to take action. So, if you're interested in investing in gold, it's worth considering.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Start trading forex today
Trade the largest and most volatile financial market in the world.
- Spreads start at just 0.6 points on EUR/USD
- Analyse market movements with our essential selection of charts
- Speculate from a range of platforms, including on mobile
Live prices on most popular markets
- Forex
- Shares
- Indices
