4 Reasons to Invest in a Gold Fund

Many investors have turned to investing in a gold fund as an alternative to the stock market. This type of investment carries with it several advantages over other types of investments. Here are a few reasons that you might want to consider investing in a gold fund.

1. Low Correlation


One of the biggest things that gold offers you is diversification from the traditional markets. Gold has a very low correlation to other types of investments. Therefore, with a gold fund, you can still be up substantially even if the rest of the market is tanking. Many other types of investments are highly correlated to one other. Therefore, when one goes down the other on goes down as well. It is nice to have something that moves independently from the rest of the market in your portfolio.

2. Convenience


Investing directly in gold can be very confusing and inconvenient for individual investors. If you buy gold bullion, you will have to come up with some way to store it safely. Most people do not want to have to keep a large amount of gold in their homes. This creates an added risk of theft and potential danger to your family. In addition to that, you have to worry about transporting the gold back-and-forth when you buy or sell. By purchasing shares in a gold fund, you can avoid all of this hassle. You will still get to speculate directly on the price of gold, but you do not have to worry about warehousing gold or transporting it. You should be able to purchase shares in this type of fund directly through any brokerage account. Therefore, this makes it widely available to the masses.

3. Constant Value


Another big benefit of investing in gold funds is that the underlying asset of the fund will always have some kind of value. When you invest in stocks or bonds, the money that you invest could potentially be completely lost. If the company files for bankruptcy, you may not be able to get anything back out of your investment. This is not the case when you invest in gold. Gold has been something of value since the beginning of time and it does not show any signs of slowing down in the near future. This is considered an eternal form of currency and is valued by every culture. Therefore, even if the rest of the stock market completely goes downhill, the value of the gold will still be there. Even though gold value can go down, it will never go down to nothing.

4. Record Highs


Over the last few years, the price of gold has consistently gone above record highs. It is on a growth curve that continues to move upwards. As an investor, the future of investing in gold looks very bright. Therefore, you could stand to benefit significantly in the form of large returns by getting involved with a gold fund.

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