Investment in gold- why is it a bad idea?

Investment in gold- why is it a bad idea

Investment is considered to be an asset which creates value and generates income overtime. Investment happens to be a convenient way of earning money but gold is considered to be the simplest form of investment. There is no paper work involved here. From the past many years, value of gold has only increased. People are always eager to sell it whenever its value is found to be even higher.

But still investment in gold is considered to be a bad idea. Why??

The price of gold is never attributed to any economic variable, infact its price is mostly investment driven. It has no untapped intrinsic value; it is worth only what people are willing to pay for it. Moreover, gold is not truly an asset as it does not necessarily generates income over time. A person may even suffer loss if its price decreases.

Gold is just a store of value; it doesn’t keep up with the inflation.

Gold, having the property of inert, can’t be use in any industry other than manufacturing jewellery. Its use in electronics is very limited. And so because of such reasons, it could be a bad idea.

 

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