Why investing in gold is a bad idea

The Cons of Buying Gold Even given these reasons for buying gold as an investment, there are some good reasons why you might not want to own it. Dealers charge premium prices and fees for gold coins. Gold has large liquidation spreads. It can be challenging to verify old or rare gold coins. In the spot market, purest quality gold was trading at Rs 45,, according to India Bullion and Jewellers Association. But the analysts agree that there is some clarity needed on the stimulus front as well as Covid situation across the country.

Thus, in the near term, some pressure in price may exist. Continue reading to learn why gold is a bad investment…. Gold hedges against inflation over many decades. Instead, you can use treasury inflation protected securities TIPS to maintain purchasing power with lower risk. And a far better option is to invest in the stock market. Some gold bugs still might be sticking to their precious metal at this point. They might argue that gold will help them survive a doomsday scenario. But will it really?

The probability of seeing a doomsday collapse in your lifetime — and gold turning into a top means of trade — is close to zero. All hell breaks loose. A catastrophe destroys the money system. Food, ammunition and medicine are the real currency.

Then during a complete collapse, you can trade a few of your extra MREs for more gold coins than you could have started with. The evidence is in, and gold is a terrible investment.

The more products they sell, the richer they become, particularly when investor sentiment is skittish. They charge more for gold-based products than the actual price of the metal.

If you choose to invest in gold, be smart about it. Here are some buying guidelines from the Federal Trade Commission:. The melt value for virtually all bullion coins and collectible coins is widely available. The seller's appraisal might be inflated. You may need to buy insurance, a safe deposit box, or rent offsite storage to safeguard bullion.

These costs will cut into the investment potential of bullion. When you buy metals without taking delivery, take extra precautions to ensure that the metal exists, is of the quality described, and is properly insured. Reputable sales reps are upfront about the risk of particular investments. Always get a receipt for your transaction. I speak and write about innovation, investor protection, retirement, money management, history and social issues. My latest book is "Lincolnomics. I've spoken across North America.

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