Are you an investor looking to diversify your portfolio, or are you a novice thinking of buying and selling gold for the first time? If you’re considering investing in gold coins, this detailed guide outlines ten fantastic reasons to take the plunge.
10 reasons to invest in gold coins
There are multiple advantages to buying gold coins as an investment. Here are 10 brilliant reasons to consider investing:
One of the best reasons for investors to buy gold, for example, gold Britannia coins, is to diversify an existing portfolio. This means adding different types of investments. Diversification is beneficial because it helps investors to reduce risks and maximise opportunities by offering an alternative to putting all their eggs into one basket.
2. Store of value
Investing can be a roller coaster ride, but some investments are safer and more secure than others. While economic downturns and price fluctuations can impact investors who buy gold coins, gold is a reliable store of value, which is much more resistant to economic turbulence than other investments. Adding gold to an existing portfolio helps investors to manage risk levels.
3. Hedge against inflation
Rising inflation rates are a subject of intense debate at the moment. One of the most important reasons to consider buying gold is to hedge against inflation. If a currency loses value due to high inflation rates, the price of gold tends to rise making it an attractive long-term investment opportunity.
4. Asset allocation
Asset allocation is a type of investment tactic, which involves deciding how to allocate investment funds. Gold is an appealing investment option because it can be used to diversify a portfolio to reduce and regulate risks. The individual can apportion assets within the portfolio in line with their objectives and risk tolerance. If you are looking for a long-term investment with low risk, for example, you may choose to allocate funds to gold coins.
Gold coins are portable assets. If you decide to invest in gold coins, you can transport and store them easily making your investment easy to manage.
Gold coins offer high liquidity because they can be bought and sold very swiftly and easily. If you need to sell quickly, or you decide that you want to allocate more funds to gold coins, you can make the necessary arrangements instantly.
Investors have put money into gold for decades. Gold investment can be an attractive proposition because it has a strong historical record for appreciation.
Some investors prefer to have tangible assets they can see and store. Gold coins are tangible, offering aspiring and experienced investors a sense of security and peace of mind.
Gold coins are not just valuable and sought-after due to the purity and quality of gold as a precious metal. They can also be highly collectable due to their design and beauty or their historical significance. Many of the most sought-after gold coins were designed and produced to commemorate special occasions or historical events, for example. The more collectable and rare a coin, the higher its value is likely to be.
10. Tax benefits
Taxes can eat into investor profits. If you’re considering putting money into an investment, it’s essential to be aware of your liabilities and responsibilities in terms of paying taxes.
Investing in gold can be a wise move, from a tax perspective. In the UK, investment-quality gold bullion is VAT-free and legal tender UK gold coins such as Britannias and Sovereigns are exempt from capital gains tax.
Are there any downsides?
There are several brilliant reasons to invest in gold but there are also a couple of downsides to be aware of, including:
- Vulnerability to theft: if you store your own gold, there is a risk of theft
- Time: it can take a long time to generate substantial profits by investing in gold coins
- Scams: if you intend to buy gold coins, be aware of scams. Always buy from reputable, reliable vendors and companies to make sure you get a fair price, which reflects the market value.
Investing in gold coins is an excellent idea for experienced investors looking to diversify their portfolios as well as beginners searching for a relatively safe and secure long-term investment.