8 Advantages of Investing in Gold and Tips for Getting Started for Beginners

Gold investment is an easy and practical investment for everyone. For investors who like stability, they may be confused which is the most promising investment between gold or mutual funds.

We tell you an interesting fact, it turns out that gold investment actually rose in prestige during the pandemic, you know! In fact, the price of gold rose during the recent Russia-Ukraine conflict.

Why this happened? Because gold is an investment instrument that is resistant to inflation. Even though the value goes up and down, the price of gold will be maintained, and will continue to rise every year.

This is the reason people like gold as a safe investment. Want to know other advantages of investing in gold? Read more in the following summary of information.

Advantages of Gold Investment

Safe

The first advantage of investing in gold is that it is safe. Having a low level of risk, gold itself is considered a safe haven or a safe choice from an uncertain situation. Other investment instruments carry an impairment risk, but not gold investments.

Gold prices tend to be maintained despite inflation and deflation. This is the reason gold is a safe investment choice in uncertain conditions, such as pandemics, wars, to economic crises. You don't have to worry, because the demand for gold will always be there even though the gold supply is limited.

Gold itself is usually used for long-term investment, which is approximately 5 years. With guaranteed price stability, you don't have to worry about saving gold for that duration.

Asset Value tends to be stable

The cause of the stability of the value of gold is the existence of a clear supply and demand in the market. In addition, owning gold today is not only considered an investment, but also a person's lifestyle. When this transfer of needs continues, the risk of the value of gold falling will be smaller.

Gold investment itself is often used for long-term investment. In this investment model, you do not earn return from owning gold. However, you can get capital gain when selling gold at a higher price when buying it.

Easy to Melt

Liquidity is one of the reasons someone chooses certain investment instruments. Unlike the case with other investment instruments, gold is very easy to liquidate.

If other investments take days, then the gold disbursement process only takes hours, even minutes. Just find the nearest gold shop and then sell the gold according to the agreed price, done.

If you don't have an urgent need, it's better to keep gold up to a certain price point or liquidate it when your investment goals have been achieved. The value of gold itself tends to follow the rate of inflation. You can sell it when the gold value is at its highest.

As an Emergency Fund

Similar to savings, gold investment also serves as an emergency fund. Moreover, with prices that tend to be maintained in times of uncertainty, gold will be a good savings for issuing emergency funds.

Just so you know, in an economic crisis, gold will be recognized as a means of payment like a function of money. Very profitable, right?

Flower Free

If you withdraw your savings at the bank, the value you receive will have a considerable difference from the actual value of the asset because of the interest charged. But unlike gold, you can invest in gold without worrying about charging interest.

Currently, some services apply an interest system for gold investment. However, you can choose a service that frees up interest, for example, investing in gold at Pegadaian. You will only be charged an administration fee.

Protector of Wealth and Inflation

With its value being maintained and slowly increasing every year, gold is a good parameter to protect one's wealth. Gold investors themselves rarely lose, so you can rely on gold to define your wealth.

Moreover, this protective function also applies when inflation occurs. Remember, that the value of gold tends not to be affected by inflation or deflation? Gold can also be a medium of exchange that is equivalent to money during inflation. In essence, gold will be security net during inflation and save you from mass panic.

Facilitate the Loan Process to the Bank

Apart from being a protector of wealth, having gold can also make it easier for you to make loans to banks. In fact, the bank can give you a loan in one day with the consideration of a certain gold value. With a gold guarantee, you can also get Privilege lower interest rates than general loans.

Investment Diversification

There are indeed many investment instruments other than gold that offer return which is quite tempting. However, no one can predict the future.

With all the benefits, investing in gold is a safe choice and can be a lifesaver in uncertain times. Therefore, there is nothing wrong with investing in gold as an effort to diversify your current investment.

Disadvantages of Gold Investment

Gold investment does have a myriad of advantages, but it also has some disadvantages, including:

Value growth tends to be slow

Gold investment is not the right choice for aggressive investors. This is because gold does not give return fast and promising. In addition, the value of gold also tends to fluctuate and increase slowly.

As a Long-Term Investment

Given the slow growth in value, gold investment is only suitable for investors who tend to have assets just in case. With this goal, gold investment is usually used as long-term savings.

In addition, you must also actively increase the value of gold by regularly saving. This is so that the value of the gold you have will also get better in the future. Having 1 gold bar is certainly different from 5 gold bars in 5 years, right?

Subject to Custody and Administration Fee

Investing is not cheap. To store gold, you have to pay for the services of the party you use as a gold depository. In addition, you will also be charged an administration fee to pay for their services.

On the other hand, the cost of care usually has a certain period of time. If the deposit period runs out, usually the fee will be deducted from the balance of your gold savings.

No Significant Impact on the Movement of the Public Economy

Unlike other investments such as stocks, gold investment does not contribute anything to the economic growth of society in general. This is because the function of gold is indeed used for personal gain.

Even so, the stable trading of gold continues to contribute to the gold industry and gold deposit services. However, in the end, profits will return to each investor.

Gold Investment Tips for Beginners

After knowing the benefits, now is the time for you to start buying gold. For those of you who are Muslims, don't hesitate anymore because MUI has decided that investing in gold in Islam is permissible (permissible) and even recommended.

Well, before you start, it's a good idea to follow the 5 tips below so you can invest with the best gold prices.

Define Investment Objectives Clearly

Setting goals is important before making any investment. The general goal of investing is to have financial freedom in the future. However, it would be better if you state your goals specifically.

This is done so that you don't get caught in an emergency, but you haven't been able to use the results of your investment so far. The easiest way to create a goal is to include the elements “when”, “what is the amount”, and “for what”.

Example: I want to invest in gold until I collect a balance of IDR 10 million for 5 years for my children's school fees.

Monitor Gold Prices Periodically

The next step is equally important, namely knowing the price of gold in the market. Indeed, gold is the most stable investment instrument from other instruments. However, considering that the price of gold follows the rate of inflation, an increase or decrease in price can occur at any time.

Therefore, it is important to buy gold at the best price. You certainly don't want to buy gold when the price soars, even though at other times you can buy it at a much cheaper price, right?

To monitor it, you can look for platforms that provide the latest information about gold prices. In addition, you can also check information through news written by the media.

Determine How to Invest and Buy Gold in a Trusted Place

Next is choosing how to invest in gold. Currently, you can invest in gold in several ways. The first is by buying directly, for example from Antam's precious metal products produced by PT. Antam Tbk.

Antam's gold itself has an international certificate from London Bullion Market Association (LBMA) so that it can be sold in worldwide markets. Besides Antam, you can also use the UBS gold option issued by PT UBS. UBS Gold also has a national certificate issued by PT UBS.

Second, you can also invest in gold by saving or paying in installments offline as well as by online via app/marketplace This gold saving service can start from IDR 5.000-IDR 10.000 only. The amount of the purchase will be converted to the amount of grams of gold that you will get.

For service offline, You can start investing in gold using the services of a pawnshop. Pegadaian also opened a Digital Pawnshop as an application to support gold investment online online. You can also choose other digital application options via marketplaces, digital wallet, and fintech startup other.

Tokopedia and Shopee are marketplace who provide this service. In addition, there are also Pluang, DANA, Bareksa, OVO, and many other gold investment saving services. Whatever your choice, make sure the app online The gold investment provider has been registered with the Financial Services Authority (OJK).

Prepare Gold Storage

After choosing a trusted third party, set up a secure gold storage space specifically for physical purchases. Usually, the preferred option is to provide a safe with Password to avoid robbers.

If you are worried about keeping it yourself, you can take advantage of the safe services from Antam or leave it at a bank or Pegadaian. To save gold, you will be charged a printing fee if you want it in physical form.

Wisely Choose Gold Melting Time

The last tip is not to rush to melt gold. You must understand that investing in gold is as security net and the goal is long term. Therefore, it takes patience to see the results for several or even decades.

Choose the right time to exchange it for cash, for example after the duration of the investment is in accordance with the goals you made earlier. We recommend that you save gold for at least 5 years so that you get a decent return.

Until here the discussion about the advantages and tips to start investing with gold. Investing always has a good impact in the future, so don't hesitate to get started, OK! Happy investing!

Image source headers: Unsplash

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